$200m Jackson deal is the most lucrative in music history

Posthumous contract eclipses $150m received by Jay-Z

Michael Jackson fans will be given several new chances to expand their record collection while his heirs spend the next seven years moonwalking their way to the bank, after the singer's estate announced the richest recording deal in the history of the music industry.

The record-breaking contract will see Sony pay a guaranteed $200m (£132m) for the right to release 10 new Michael Jackson albums, video games and DVDs between now and 2017. If certain sales figures are met, the family of the late performer could eventually earn as much as $250m (£165m).

Those figures dwarf the previous highest sum advanced to a musician: the $150m (£99m) that Live Nation paid to sign Jay-Z to a 10-year deal in 2008. And they seem all the more remarkable given the parlous state of the music industry, which has seen album sales decline by 52 per cent over the past decade.

But like a modern artist whose paintings soar in value after his death, Jackson has become a hot ticket in the nine months since he suffered a cardiac arrest in Los Angeles as he prepared for a comeback tour at the age of 50.

More than 31 million of his albums have sold during that period. And the documentary film This Is It, which was largely filmed during the final weeks of his life, made $260m (£171m) at the box office, becoming the most lucrative concert film ever released.

Adding to Sony's enthusiasm for the deal is the discovery of a collection of material that was recorded by Jackson, but never released, over a period of more than three decades. It reportedly includes remixed versions of many of his most famous records, plus several completely new tracks.

An album of fresh new material is scheduled to hit the shelves in November, just in time for the Christmas shopping season, featuring a selection of tracks originally intended for Jackson's best-selling album Thriller, plus a duet with the singer Paul Anka.

After that, Sony is likely to release anniversary editions of Bad and Thriller, plus an updated version of his 1979 album Off the Wall, a DVD compilation of his music videos, and a Jackson-themed video game.

The company is also poring over live recordings made during the singer's lifetime, and reportedly has sufficient material for at least two concert albums. It also has the rights to produce live Jackson shows, and a Cirque du Soleil tribute is rumoured to be in development.

"This agreement with Sony Music demonstrates the lasting power of Michael's music by exceeding all previous industry benchmarks," said John Branca, a lawyer and co-administrator of the Jackson estate, who negotiated the deal. Sony will not have the right to sell lucrative Michael Jackson memorabilia, which for the time being remains with his estate.

When Jackson died, he was preparing to return to the stage, after an absence of almost a decade, in a bid to clear debts estimated at almost $400m (£263m). Income from the deal will be shared between Jackson's mother and his three children.