The words for Be Mery were found "doodled" in the back of a monk's prayer book dating back to about 1500.
It is the only surviving book of its type from the East Sussex abbey, built on the site of the Battle of Hastings.
Visitors will be able to hear a recording of the song for the first time since the Reformation.
The carol was found by English Heritage historian Dr Michael Carter while he was researching the history of Battle Abbey.
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The service book is now in the library of Trinity College, in Cambridge.
Dr Carter said: "This carol is clear evidence that the Battle monks were very much part of the thriving devotional culture of Catholic England, a culture brutally cut short by the Reformation and the dissolution of the monasteries which extinguished 500 years of religious life at Battle.
"Our new exhibition has been designed to reveal insights into that life, the importance of prayer and worship, the tremendous power and wealth of the abbey and what it was like to be an ordinary monk there."
Be Mery has been performed and recorded for English Heritage by Schola Gregoriana: The Association for Gregorian Chant.
The new permanent exhibition opens on Saturday in the abbey gatehouse.
Source: English Heritage
A long-forgotten medieval carol has been set to music for the first time in 500 years as part of an exhibition about monks at Battle Abbey.