All 16 acts to reach the Live Shows of the ITV1 singing competition will appear on the track, which will be released next month. All proceeds from the song will benefit ACT & Children's Hospices UK.
"I've seen the amazing work they do for kids and their families who need help and support," said X Factor creator Simon Cowell.
"I am thrilled that the X Factor charity single this year will benefit this charity."
Meanwhile, finalist Kitty Brucknell also expressed her excitement for the project, saying: "It's incredible to be able to give something back and hopefully help a lot of people."
Frankie Cocozza added: "[It's a] brilliant thing to be doing for a brilliant charity."
'Wishing on a Star' will serve as the fourth charity single release by X Factor finalists. It follows last year's successful cover of David Bowie's 'Heroes' and 2009's chart-topping version of Michael Jackson's 'You Are Not Alone'.
ACT and Children's Hospices spokesperson Barbara Gelb said: "The money raised from this single gives us the opportunity to improve the lives of these children and families.
"Every single bought, either online or through the High Street, will make such a difference."
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Watch Rose Royce perform 'Wishing on a Star' below: