The new US$400 million building would become a key showpiece in the city's West Kowloon Cultural District - a 40ha waterfront arts and entertainment development originally masterminded by Foster.
According to both the Guggenheim Foundation and the Centre Pompidou, the museum will become 'a world-class cultural complex devoted to the fields of modern and contemporary art, the moving image and design'.
The latest announcement comes less than a year after the New York Timesreported the parties were 'not interested' in working together on the project.
However, a statement from the Guggenheim stated the institutions would 'collaborate as equal partners [on the scheme] rather than pursue parallel paths' and may even bring in other 'major institutions into the project'.
Meanwhile, the Guggenheim continues to work with Zaha Hadid on another museum bid in Singapore, which is backed by casino giant Sands.