The 19-year-old singer has officially joined the judging panel of the Fox talent show alongside Britney Spears, Simon Cowell and LA Reid.
Britney Spears has allegedly signed a $15 million (£9.3m) deal for the second season of the show.
Lovato's contract is worth around $14 million less than the 'Toxic' singer's, according to TMZ.
The entertainment site also claims that Lovato has rescheduled her entire upcoming tour in order to appear on the show.
Speaking at last night's (May 14) upfront presentation, Simon Cowell said of Lovato's appointment: "Demi's had an amazing career in music, TV and film for someone her age. She's young, confident, and enthusiastic. I think it's really important that she speaks to our younger audience."
The X Factor USA will return to Fox later this year, with initial auditions already taking place.
Watch the video for Demi Lovato's 'Skyscraper' below: