The pair started tweeting each other this week after hanging out, sparking rumours they have been working on new material in the recording studio.
"New soft spot for @kylieminogue," Sia tweeted, before Minogue replied: "@Sia is the business....."
Sia later added: "@kylieminogue i can't believe we forgot to do a PHOTOSHOOT."
Sia has previously penned hits for Rihanna, Flo Rida, David Guetta and Christina Aguilera.
Minogue has also been working with Roc Nation artist GiTA, as well as Chris Lake and Nom De Strip.
"In the studio with the lovely @kylieminogue @chrislake @NomDeStrip #Studiolife," GiTA revealed.
Minogue's new single will reportedly be "coming soon" after the star signed a new management deal with Jay-Z's Roc Nation.
Watch the music video for Kylie Minogue's 'Love At First Sight' below: