The Telegraph reports Abramovich plans to eclipse his previous New Year's Eve celebrations by spending more than £5 million on his 300 guests.
The Peppers will play at the exclusive event, held at the Chelsea football club owner's £58 million estate on the Caribbean island of St Barts.
The estate near Gouverneur beach was previously owned by US banking tycoons the Rockefellers and has a number of swimming pools, pavilions and beach bungalows.
Guests have been told to wear "island chic" at the event, which will run from 10pm until 4am, with partygoers retiring to a fleet of super-yachts in the marina at the end of the evening.
No word on how much the Peppers are taking home for their efforts.
The band will be inducted into the Rock & Roll Hall Of Fame in Cleveland on April 14, 2012, alongside Guns N’ Roses, The Beastie Boys, The Small Faces/The Faces, Donovan and Laura Nyro.
Red Hot Chili Peppers Red Hot Chili Peppers – Monarchy Of Roses
Later with Jools Holland – November 21, 2011
See also:
Red Hot Chili Peppers: Anthony Kiedis talks Rock Hall induction
Red Hot Chili Peppers: Flea comments on Rock Hall induction