Dutt will also feature in the song, with dance moves choreographed by his friend Ahmed Khan, reports IANS.
A source from Department's producers Viacom18 Motion Pictures said: "The peppy, edgy number has been composed by Sandeep Chowta, and Dutt would be recording the song in his own voice.
"There's no doubt that Sanjay Dutt is a major attraction after Agneepath. We want to make sure he is projected as the film's USP."
Khan confirmed that the additional song was being filmed, saying: "Yes, we are shooting a song for Department. It's a music video to be sung by Baba (Sanjay).
"He and I are getting together once again after Aye Shivani in Sanjay Chhel's Khoobsurat (he sang it and I shot it). This time it's an edgy song with no dancing."
Dutt has also sung in Rajkumar Hirani's Munnabhai M.B.B.S. and Kaante.
Department, which also stars Rana Daggubati and Amitabh Bachchan, opens on May 18 in India, with wider release dates to be confirmed.