The 23-year-old 'You Belong with Me' hitmaker has co-written the single with Sheeran, reported Contactmusic.
The announcement comes after Taylor and Sheeran have been performing the same song during her 'Red' tour over the last two months.
The pair have been touring US since March, 2013. They are all set to resume their gigs from Detroit on May 4 after a short break.
Sheeran recently admitted that the duo were likely to record more tracks together in the future because they have developed a special bond over their love of songwriting and acoustic guitar.
"We've got a similar sense of humour. I guess we just have a lot in common," Sheeran said.
The duo had earlier denied runours of dating each-other.
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