The six-song EP "Deliverance," was due to go on sale on Friday and would mark the first in a series of planned posthumous releases of material by Prince from the large vault of discarded or unfinished material he reportedly left behind.
According to a statement from independent record company Rogue Music Alliance (RMA), the six songs were recorded by Prince between 2006 and 2008.
After his death of an accidental drug overdose in 2016, his sound engineer, Ian Boxill, spent the last year completing, arranging and mixing the songs, RMA said.
Prince's estate however filed a civil lawsuit in Minnesota district court on Tuesday seeking an injunction against the release.
According to the court documents, the lawsuit claims breach of contract, theft and misappropriation by Boxill of the recordings.
Boxill and RMA did not immediately return calls for comment on the lawsuit on Wednesday.
"Prince once told me that he would go to bed every night thinking of ways to bypass major labels and get his music directly to the public. When considering how to release this important work, we decided to go independent because that's what Prince would have wanted," Boxill said.
Prince split with record label Warner Bros. in 1996, when he changed his name to a symbol, but re-signed with them in 2014
Warner Bros. said in February it would release two albums of new music from the pop funk musician in June, along with a remastered copy of his hit album "Purple Rain" and two complete concert films from the vault of the singer's Paisley Park recording complex near Minneapolis.
Prince died on April 21, 2016, at age 57 of an overdose of the painkiller fentanyl.
The value of his musical legacy, including a cache of unreleased recordings, has been estimated by some to exceed $500 million when factoring in future royalties, retail sales and commercial rights.
Prince left no will and his estate has been plagued for the past year by disputes among his sister and five surviving half-siblings over how to manage and protect his legacy.