Their chemistry in the now legendary 1978 musical film made them worldwide stars and their duet 'You're The One That I Want' became the best-selling duet in history.
The idea to get together and record from songs came from the memory of the success of that song, reported ABC online.
"From the moment we decided to do this, magic happened. Everyone we contacted agreed to do it," said Travolta in a statement.
"It just fell into place. With our busy schedules, I don't know how we got it done. John and I have always connected. That's never gone away. When we're together, we have a good laugh and feel bonded to one another. We've been through some amazing experiences together," said Newton-John.
The disc will also contain guest appearances from Barbra Streisand, Tony Bennett, James Taylor, Kenny G, Cliff Richard and jazz legend Chick Corea.
All songs will be Christmas staples bar one, a new one called 'I Think You Might Like It' written by Jay Farrar who wrote the pair's famous hit.
Speaking about their concept for the disc, Travolta said, "I wanted people to be able to play it around the house or in the car during the holidays, and make us part of your celebration. Gathering around house listening to Christmas music has always been an important part of that time of the year to my family."
