The 43-year-old star was making the music video for the track with the 'Racks In The Middle' star and John Legend, who also features on the song, days before he was shot and killed outside his Marathon clothing store in Los Angeles on March 31.
Khaled wants to share with the world the ''energy and positivity'' Nipsey - who was just 33 - brought to the set that day, and he has been given the ''full blessing'' of his late friend's family to share the ''moment'' they shared together.
The 'No Brainer' hitmaker has also announced that all money made from 'Higher' will go to Nipsey's two-year-old son Kross - whom he had with partner Lauren London - and his 10-year-old daughter Emani, from a previous relationship.
In a statement issued on his social media profiles, Khaled announced: ''Recently, I embarked on a soul-searching journey down a road I never thought I would travel in a million years.
''It began when a tragedy robbed the world of an enlightened soul, a brother, a father, a partner and my friend, Nipsey Hussle.
''Just days prior, he shared his energy and positivity with me on a video set for a song called, 'Higher.'
''After much prayer and reflection; and with the full blessing of the Asghedom family, I am sharing that moment with the world.
''The very title of the song reminds us that vibrating on a 'Higher' level was the essence of Nipsey's soul.
''It is in this spirit, of moving forward, of preserving his mission that I, my co-writers, producers and label partners are donating 100% of all our proceeds from 'Higher' to Nipsey's children, Emani and Kross.
''The Marathon Continues. (sic)''
On hearing Nipsey had passed away, John shared how ''stunned'' he was by the tragic news and revealed they had been filming in Inglewood, California, close to where the hip-hop star grew up.
The 'All of Me' hitmaker tweeted: ''RIP Nipsey. I just spent Thursday with him filming a video for a beautiful new song we created with Khaled. We filmed in Inglewood, close to where he grew up. He was so gifted, so proud of his home, so invested in his community. Utterly stunned that he's gone so soon.''
'Higher' is featured on Khaled's album 'Father of 'Asahd', which is released on Friday (17.05.19).
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