The trio have collaborated with the remaining members of the group T-Boz and Chilli, who originally released the song in 1995.
Capital FM reports that TLC will appear in the music video for the track, which is available to download from November 5.
T-Boz - real name Tionne Watkins - reportedly agreed to the collaboration after watching Stooshe perform an acoustic version of the track online and congratulated them.
'Waterfalls' will appear on Stooshe's upcoming self-titled album, which is due out in November. The song will reportedly be released as a double A-side with a brand new track.
It was previously revealed that Watkins has written and will feature on a song called 'Red Planet', which will appear on Little Mix's debut album.
Watch Stooshe perform 'Waterfalls' live below: