Steps will release a new album in 2017.
The band - comprised of Claire Richards, Ian 'H' Watkins, Lee Latchford Evans, Lisa Scott Lee and Faye Tozer - are reuniting for a New Year's Eve (31.12.16) gig at London's G-A-Y club and will follow it up with new music in 2017.
A source told The Sun: "This reunion has been in planning for a long time with various ideas thrown about.
"But the one thing everyone could agree on was it's time for Steps to release new music and inject some fun back into the scene.
"Obviously the band have all matured in the two decades since they found fame, and so has their music.
"But diehard fans won't be disappointed - especially not when they'll still be wheeling out their cheesy hits on stage."
Steps split in 2001 and had a brief reunion in 2011.
Announcing their split in a statement, they said: "After five incredible years, we have decided it's time to move on to new challenges.
"We have always said that when the time came, we would leave as good friends and go out while we were on top, as although we are very sad, that's what we have done.
"We are looking forward to making our next plans but for now we just want to send our heartfelt thanks and love to all the people who have supported us - you truly are the best fans in the world."
However, it was soon revealed that Ian and Claire had quit the band to start a career as a duo and admitted that it had led to problems with the other three.
Claire said previously: "We had our reasons for leaving and most of the stuff said about us is wrong.
"At some point you've got to say to yourself, 'It doesn't matter how much money I earn this year, I'm miserable'."
Ian added: "We could have sold millions more albums, but it wasn't worth it... there was no point in flogging a dead horse."
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