The news provider plans to begin publishing text, photo and video news from the outside world for Second Life members this week, as well as news from within the game for readers outside it.
Created by Linden Lab in San Francisco, the game takes place inside a parallel universe existing on the Internet.
Second Life is a virtual, three-dimensional world where users create and dress up characters, buy property and interact with other players.
More than 900,000 users have signed up to build homes, form communities and live out alternative versions of their lives in the 3D, computer-generated world.
Players spend around US$350,000 a day on average, or a rate of $13 million a year.
Participants buy and sell goods and services using a virtual currency, known as Linden Dollars and an online marketplace allows users to convert the currency into real US dollars, enabling users to earn real money from their activities.
Adam Pasick, a Reuters' media correspondent based in London, will serve as the news organisation's first virtual bureau chief, using a personal avatar, or animated character, called "Adam Reuters," in keeping with the game's naming system.
"As strange as it might seem, it's not that different from being a reporter in the real world," Pasick said.
"Once you get used to it - it becomes very much like the job I have been doing for years."
Car maker Toyota, music label Sony BMG, computer maker Sun Microsystems, and technology news company Cnet are among the companies taking part in Second Life.
Adidas and American Apparel sell clothes and accessories for people to dress their avatars.
Starwood Hotels has built a virtual version of "aloft," a new hotel chain it plans to open in the real world in 2008.
Reuters will have journalists reporting and writing financial and cultural stories within and about Second Life as part of the London-based company's strategy to reach new audiences with the latest digital technologies.
Second Life citizens can stay tuned to the latest headlines by using a feature called the Reuters News Center, a mobile device that users can carry inside the virtual environment.
Stories will focus on both the fast-growing economy and culture of Second Life and also include links to Reuters news feeds from the outside world, ranging from Baghdad to Wall Street.
News from the game can be found at the link below.