'The Winner Takes it All' hitmakers have teamed with the 23-year-old dance producer for the track, 'We Write The Story', which will be the main theme of the Eurovision Song contest, which takes place in May. The song will not be used as an entry.
Benny and Bjorn said they agreed with the ''vision for the contest held by broadcaster STV.''
They added: ''This led us on to the assignment to collaborate with Avicii on a piece of mutual understanding and fellowship; it's a lot of fun and very inspiring.''
Avicii's executive producer, Ash, said: ''The collaboration between generations is extremely exciting.''
Benny and Bjorn - who were in ABBA with Anni-Frid Lyngstad and Agnetha Fältskog - are no strangers to the Eurovision contest, as their band rose to fame of the back of their 1974 win at the event with 'Waterloo'.
ABBA went on to become the most successful group to have competed in Eurovision, selling hundreds of millions of records worldwide.
Sweden are hosting the competition in Malmo after singer Loreen was victorious in last year's event singing her track 'Euphoria'. 2013 is the fifth time overall the contest has been held in Sweden.