The location app is designed to allow Facebook users to find friends in the area.
It will run even if the program isn't open on a user's handset.
Facebook already has a mobile "Find Friends" app, which allows users to let others know where they are by "checking in" at a bar, a library etc, the Telegraph reports.
According to a report by Bloomberg, the app, which is set to be launch in mid-March according to the Bloomberg report, could then prove useful to the social networking site in the way they target advertising based on the places their users visit.
Earlier, Facebook updated its internal search engine to allow members to search more easily through their friends'' profiles.
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