The Gaia Alert System issued an alert on 2020 August 28, on Gaia 20eae when its light curve showed a ∼4.25 magnitude outburst. We present multi-wavelength photometric and spectroscopic follow-up observations of this source since 2020 August and identify it as the newest member of the FUor/EXor family of sources. We find that the present brightening of Gaia 20eae is not due to the dust clearing event but due to an intrinsic change in the spectral energy distribution. The light curve of Gaia 20eae shows a transition stage during which most of its brightness (∼3.4 mag) has occurred at a short timescale of 34 days with a rise-rate of 3 mag/month. Gaia 20eae has now started to decay at a rate of 0.3 mag/month. We have detected a strong P Cygni profile in Hα which indicates the presence of winds originating from regions close to the accretion. We find signatures of very strong and turbulent outflow and accretion in Gaia 20eae during this outburst phase. We have also detected a red-shifted absorption component in all the Ca II IR triplet lines consistent with signature of hot in-falling gas in the magnetospheric accretion funnel. This enables us to constrain the viewing angle with respect to the accretion funnel. Our investigation of Gaia 20eae points towards magnetospheric accretion being the phenomenon for the current outburst.