The American Idol judge is expected to announce the new venture, eleveneleven, on Wednesday.
Chance was spotted by DeGeneres after posting a video of himself playing Lady Gaga's "Paparazzi" at a sixth grade music festival. The video has now been viewed about 20 million times.
In a statement she said: "Greyson... inspired me to start a record label called eleveneleven. He is my first artist and we are making a record together," the BBC reported.
DeGeneres said she will continue to use her show as a platform to find new artists, whom she will sign to eleveneleven.
Guy Oseary, Madonna's manager, and Troy Carter, Lady Gaga's manager, have signed on to co-manage Chance.