The music legend, 74, will appear as part of a challenge on the new series of the programme, which airs on BBC 3.
The Crocodile Rock singer is the biggest-ever signing for the hit reality show.
An insider told the Daily Star Sunday : “Elton is a massive fan of RuPaul and the show, so he was keen to be part of the new series.
“To say producers were thrilled to get him to sign up would be a massive understatement. They couldn’t believe their luck.
“Plenty of rival reality shows have never secured a guest this big.”
Elton, who recently vowed to kill off his most famous song because it was written as a joke, filmed his appearance earlier this year.
The legend couldn’t visit the studio in Manchester due to coronavirus restrictions, so he was broadcast via video link.
The insider said: “When Elton flashed up on the screen, the contestants couldn’t believe what they were seeing.
“His appearance was the big talking point during filming because it was such a fantastic moment.”
A BBC source said: “Producers have gone all out to get some great names for this series. It is definitely going to be the most exciting line-up yet.
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“Elton is by far the biggest star they’ve got taking part, but he won’t be the only A List name.
“Drag Race UK has become a big hit for the BBC and execs think it can get even bigger.”
The Vivienne, who won the first series of RuPaul’s Drag Race UK, has announced she’s joining the cast of Emmerdale for a very special episode.
The Welsh-born drag queen who shot to fame with her uncanny impression of Donald Trump on the show is joining the ITV soap for a one-off Pride episode, but said she’d love to become a regular at The Woolpack.