According to a report on the Times' own technology blog, the service has been under development for the past six months at Betaworks and is likely to be launched as an iPad application later this year.
A placeholder for the service went live yesterday but according to the Times blog both the newspaper company and Betaworks are not yet commenting in detail on the service itself.
Michael Zimbalist, vice president of research and development at The Times Company, confirms in the New York Times article that a prototype is being developed.
"We're abstracting from that a vision of how social sharing and the real-time Web are going to influence the news consumption experience. We decided to develop a prototype that we thought was illustrative of where the world was heading."
Journalism.co.uk has not yet had a response to a request for comment from the New York Times. Betaworks declined to comment further.