The announcement Thursday comes a month before Apple Inc. starts selling its smartwatch.
Tag Heuer's version is expected to be ready at the end of the year. The companies did not say what it will look like or how much it will cost, but watches from the luxury timepiece maker typically cost $1,000 and up.
The Apple Watch will start at $350 when it goes on sale April 24, but ones made with 18-karat gold begin at $10,000.
The Tag Heuer watch won't be the only fashionable smartwatch competing with Apple. Clothing maker Guess worked with a start-up, Martian Watches, to create a line of fashionable smartwatches modeled on Rigor, a traditional watch line from Guess. Another small company, Burg, has a model with Swarovski crystals.
The Tag Heuer smartwatch will use technology from Intel, whose Basis subsidiary already makes a fitness tracker called Peak. It will run Google's Android Wear system, which is used in smartwatches by Motorola, Sony, LG and others. Android Wear emphasizes voice controls, although some selections can be made through buttons and touch screens.