GATINEAU, Quebec—Canada moved Thursday to give households greater freedom to choose the television channels they want as part of their cable package, making it one of the biggest jurisdictions in the developed world to compel some form of a-la-carte TV offering.

The change, unveiled by Canada’s broadcast regulator and set to come into force next year, brings an end to a hotly contested fight by cable firms that sought to keep the status quo, and marks a victory for consumers who will no longer have to pay for bundles of channels.

U.S. consumer advocates said they are watching developments in Canada closely given their push for a pick-and-pay system in the U.S. has failed to gain traction.

“Canada could serve as a real-world example of whether pick-and-pay can really work,” said John Bergmayer, senior attorney at Washington-based Public Knowledge, a nonprofit group that lobbies for affordable communications.

The move by Canada comes at a time when broadcasters and cable- and satellite-TV providers in the U.S. and Canada are scrambling to deal with the competitive threat posed by Internet-based TV, through streaming services such as Netflix Inc., and the emergence of potential new players such as Apple Inc. Canada’s biggest cable-TV distributors— BCE Inc., Rogers Communications Inc. and Shaw Communications Inc. —have in recent months released their own online-streaming services to compete with Netflix but have restricted access to date to their own subscribers.