Topological degeneracy is the degeneracy of the ground states in a many-body system in the large-system-size limit. Topological degeneracy cannot be lifted by any local perturbation of the Hamiltonian. The topological degeneracies on closed manifolds have been used to discover/define topological order in many-body systems, which contain excitations with fractional statistics. In this paper, we study a new type of topological degeneracy induced by condensing anyons along a line in two-dimensional topological ordered states. Such topological degeneracy can be viewed as carried by each end of the line defect, which is a generalization of Majorana zero modes. The topological degeneracy can be used as a quantum memory. The ends of line defects carry projective non-Abelian statistics even though they are produced by the condensation of Abelian anyons, and braiding them allows us to perform fault tolerant quantum computations. © 2013 American Physical Society.