The Swedish pop group have not formally performed together since they split up more than 30 years ago but did appear at a 50th anniversary party in June.
The project, which will involve virtual reality and artificial intelligence, has been described as a "new entertainment experience".
It will be developed in collaboration with music manager Simon Fuller.
"We are exploring a new technological world that will allow us to create new forms of entertainment and content we couldn't have previously imagined," Fuller said in a statement.
Full details of their new project will be announced in 2017.
Agnetha Faltskog, Bjorn Ulvaeus, Benny Andersson, and Anni-Frid Lyngstad parted ways in 1982 after more than 10 years together.
The group announced they will work with Fuller, who rose to fame managing the Spice Girls, on what is being described as a "groundbreaking venture that will utilise the very latest in digital and virtual reality technology".
Lyngstad said fans around the world always ask about a reunion, and added: "I hope this new Abba creation will excite them as much as it excites me."
Andersson said: "We're inspired by the limitless possibilities of what the future holds and are loving being a part of creating something new and dramatic here. A time machine that captures the essence of who we were and are."
The project will aim to take the Abba experience to a new generation of fans and will enable them to see, hear and feel the band "in a way previously unimagined", a press release said.
In June this year the band performed together for the first time in 30 years to celebrate the 50-year partnership between songwriters Ulvaeus and Andersson.
Abba's biggest hits include Waterloo, Dancing Queen, Mamma Mia and Super Trouper.
Their music was adapted into the successful theatre show, Mamma Mia! which was also turned into a 2008 film featuring Meryl Streep, Julie Walters and Pierce Brosnan.
Follow us on Twitter @BBCNewsEnts, on Instagram, or if you have a story suggestion email entertainment.news@bbc.co.uk.
All four original members of Abba are to reunite for a new digital entertainment project.