The duo recorded an entire album together last weekend, with Vernon's Bon Iver bandmate Sean Carey also featuring. It was produced by Ryan Olson.
"This process was exhilarating, and it drove us further. We were originally going to be down there for a day," Astronautalis - real name Andy Bothwell - told Citypages.
"A lot of my fans are like, 'Oh this is going to be amazing: Astronautalis rapping and Justin singing choruses'. It's not going to be that."
The pair have yet to reveal the name of the project, but are hoping to release it in the near future.
Bon Iver recently collaborated with The Flaming Lips for the band's new album The Flaming Lips and Heady Fwends.
> Bon Iver: 'It's hard to accept Grammy for Best New Artist'
Listen to Bon Iver's 'Re: Stacks' below: