For decades now, satellite altimetric observations have been successfully integrated in numerical oceanographic models using data assimilation (DA). So far, sea surface height (SSH) data were provided by one-dimensional nadir altimeters. The next generation Surface Water and Ocean Topography (SWOT) satellite altimeter will provide two-dimensional wide-swath altimetric information with an unprecedented high resolution. This new type of SSH data is expected to strongly improve altimetric assimilation. However, the SWOT data is also expected to be affected by spatially correlated errors and, hence, can not be assimilated as easily as nadir altimeters. The present paper proposes to embed a state-of-the-art correlated-error reduction (CER) method for the SWOT data into an ensemble-based DA scheme. The DA with the new correlated-error reduced-data (CER-data) is implemented and tested in a simple SSH reconstruction problem using artificial SWOT data and a quasi-geostrophic model. The results show that, in an energetic large scale region, the DA with CER-data-in comparison to the classical DA-reduces the root-mean-square-error (RMSE) of the reconstruction in SSH by approximately 10%, in relative vorticity by 5% and in surface currents by 5-10%, and also slightly improves the noise-to-signal ratio and spectral coherence of the SSH signal at mesoscale (100-200 km) but with a small degradation on the large scales (>300 km). In a less energetic region, the DA with CER-data cuts down the RMSE in SSH by more than 50% on average therefore allowing a significantly more accurate reconstruction of SSH at mesoscale in terms of noise-to-signal ratio, spectral coherence, and power spectral density.