Mamma Mia! Here We Go Again is released in United Kingdom cinemas on July 20.
Cher also joins the cast, playing the mother of Streep's character Donna Sheridan, while James plays a younger version of Donna.
The album, she said, would be a companion of sorts to her role in the all-ABBA movie musical, "Mamma Mia!". Here We Go Again has worked in the industry for decades, amassing quite an impressive fortune along the way.More news: Trump calls European Union foe on eve of Putin summit
But the star revealed that her cover of "Fernando" for the film will not be her only ABBA-related track to look forward to.
"I think people are going to be transported to this attractive Greek island with all these beloved characters and all these fabulous songs".
While ABBA hits like "Take a Chance on Me" and "Dancing Queen" have previously been covered by Erasure, by A-Teens and on "Glee", Cher said her renditions would break away a bit from the tried-and-true, 1970s Europop sound.
It's not clear when the album is set to drop but fans are thrilled with the news.More news: Justine Greening calls for a fresh vote on Brexit
"I laughed out loud many times when I read (the script's first draft)".
"Never in our wildest dreams did we think that these songs that we wrote would last for such a long time".
The Daily Mail said the movie is "much slicker than the original", adding: "Lily has a surprisingly good voice and sings on 11 of the 18 Abba numbers in the film - and three of them are solos".
The band made a decision to call it quits in 1983.More news: Eight rhinos die after move to a new park in Kenya
Both Agnetha and Bjorn and Anni-Frid and Benny married and divorced each other during the lifespan of the group's success.
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