The 24-year-old DJ has said that he will record an Indian version of the track 'Levels' with the singer and X Factor judge, The Times of India reports.
"I'm just back from my first India tour and what a great time I've had. I've been hearing so much about Bollywood music that I just love the idea of merging the number one voice of Bollywood with high energy 'house' music," said Avicii.
The Swedish star added: "I think the results of this project will prove fantastic indeed. I can't wait to finish it."
Avicii recently settled a plagiarism case with Leona Lewis over her use of his instrumental track 'Fade Into Darkness' on the single 'Collide'.
Nigam has earlier worked with a number of international artists including Kylie Minogue, Jermaine Jackson and Britney Spears.
> Read Digital Spy's interview with Sonu Nigam here