The duo first sang together on Hill's 1998 track EVERYTHING IS EVERYTHING, which kick-started Legend's own solo career.
Two tracks are being recorded, one of which will feature on Hill's forthcoming album KHUNAMI PHASE, and the other on Legend's new solo disc.
A source tells British newspaper the Daily Star, "Lauryn got in touch with John and congratulated him on his Gap advert with Joss Stone.
"They chatted for a bit then she presented the idea of them working together again - which he jumped at.
"Lauryn and John have done a song for her next album and will do one for his follow-up to GET LIFTED.
"Neither track is finished yet. They only got down to business last week."
Soul legend Stevie Wonder is also said to be interested in recording with newcomer Legend after they performed a duet at the Black Entertainment Television (BET) Awards in Los Angeles in June (05).