IKEA has announced it will work alongside fashion designer Virgil Abloh to produce a collection aimed at millennials moving into their first homes, which could also include his take on the brand's iconic blue Frakta bag.

The collaboration was announced at IKEA's Democratic Design Day in Älmhult, Sweden – an annual event during which the company announces its new projects for the forthcoming year.

During the presentation, Abloh – a long-time collaborator of rapper Kanye West and founder of fashion brand Off-White – also presented his own version of the blue Frakta bag that he had made from cardboard and scribed "SCULPTURE" on the side.

"We're in a moment where IKEA is transcending, and people are bringing this do-it-yourself culture to the blue bag," he said. "What I'm most interested in is doing that process in partnership with the brand. It's allowing me to put my opinion on a classic."

The humble Fratka tote recently hit headlines after luxury fashion house Balenciaga released a £1,705 version of the 40p bag. IKEA responded with a spot-the-difference guide, and a strings of hacks from baseball caps to G-string underwear soon followed.

IKEA first approached Abloh to come up with a collection for the millennial generation that would allow them to furnish their surroundings at an affordable price.

"We've been curious about Virgil Abloh for some time," said Henrik Most, creative leader at IKEA Range and Supply. "Him being a multi-creative persona who doesn't care about boundaries combined with his close connections to young people, their needs and wants. It made us curious."

"IKEA wants to explore the first home and how to make it inexpensive and fashionable," Most added. "And we believe Virgil Abloh and Off-White is the perfect match to do that with."

Abloh, who is also a music producer, DJ and trained architect, will work alongside IKEA to produce a collection of furniture that is tailored specifically to the needs, tastes and budgets of young adults.

He refers to this group of people as a "post-Tumblr generation", who tend put a high "emotional value" on art and design in the home.

"I believe we're in a compilation/post-Tumblr generation, you take a number of images that aren't yours and compile them to make an expression about yourself," he said.

"My premise is to employ the ability to create these things in a place, with IKEA as the engine behind the thought process, so that young adults can live with design and art."

Abloh, who has worked with a number of brands including Nike, described the collaboration with IKEA as the most important design project he's ever taken on.

He plans to work with students to create the pieces, and although details of what will be included in the collection are yet to be revealed, IKEA says it will launch in 2019.

Also during this year's Democratic Design Day, the brand laid out plans for a new micro-living furniture collection that takes cues from compact solutions for space travel.

Last year, the Swedish furniture giant – which emerged as the most influential brand on the inaugral Dezeen Hot List – announced collaborations with Hay and Tom Dixon.