The singer, who has been working on launching In The Name Of since 2009, is said to have been back by the label giant, and hopes to launch her first act later this year.
The Sun reports that the 'The Fear' star will be on a salary of £100,000 and is expected to set up the company and hire all staff.
Allen's first signing is Cults, a New York-based duo made up of Brian Oblivion and Madeline Follin, who have garnered interest from a number of major labels in the last 12 months.
Sony is one of the largest record company's in the world, with acts including Ke$ha, Britney Spears and Kings Of Leon on their roster.
Last year Allen denied saying that she was "retiring" from pop music.