The 71-year-old Oscar winner will reunite Meryl Streep, her cos-tar in the 1983 film "Silkwood", reported Entertainment Weekly.
The details of Cher's role in the 2008 hit film's follow-up are being kept under the wraps.
This will be the "Believe" hitmaker's first on-screen film role since 2010's "Burlesque".
Over the weekend, Cher teased her appearance in the Ol Parker-directed film on Twitter.
In a series of tweets, she wrote, "FERNANDO.
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"THE ROAR OF GUNS & CANNONS ALMOST MADE ME CRY...
"Just went through two dance numbers, Everyone's great."
The film series has been adapted from the successful stage musical, based on the songs by the band ABBA.
"Mamma Mia 2" also features Amanda Seyfried, Dominic Cooper, Lily James, Colin Firth, Pierce Brosnan and Jeremy Irvine.
The film is set to release on July 20 next year.