The Swedish star, 62, is working with songwriter Jorgen Elofsson who has previously collaborated with the likes of Celine Dion, Britney Spears and Westlife, according to her spokesman Staffan Linde. He could not say when the new album will be released.
ABBA shot to fame when they won the 1974 Eurovision song contest with Waterloo, and their enduringly popular string of hits also include Dancing Queen and Gimme Gimme Gimme (A Man After Midnight). The group sold around 370 million records in total.
After the band split in the early 1980s, Faltskog pursued a solo career for a few years, but then went into a music hiatus for most of the 1990s. Her last album, "My Colouring Book," contained cover songs and was released in 2004.
Meanwhile, it was announced that a museum devoted to ABBA will open next year in the Stockholm aiming to attract hundreds of thousands of visitors.
The museum, a permanent exhibition within a hall of fame of Swedish pop music, will feature memorabilia like stage costumes worn by the singers. Visitors will also be able to sing along to ABBA songs alongside life size holograms of the group.
"Swedish pop music is an important part of our cultural heritage," said former ABBA member Bjorn Ulvaeus, who is one of those behind the museum's creation. "And Abba is one of our most well-known brands."
Separate plans for an earlier museum on ABBA were shelved in 2008.
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