The decision to cast a Hispanic woman is a significant break from a long tradition of white and usually blonde Cinderellas.
Cabello will also be closely involved with the music for the film.
The reigning VMA Artist of the Year is set to make her acting debut in Cinderella, a modern re-imagining of the classic tale about an orphaned girl and her evil stepmother.
James Corden, a British actor, comedian, and television host, is producing the project.
Cabello began her career as a part of girl group Fifth Harmony.
Cannon was an Emmy-nominated writer on "30 Rock" and wrote the "Pitch Perfect" comedies. After going solo, the singer's single, Havana, hit #1 on the Hot 100, Billboard 200, and Artist 100 charts, as well as becoming the most-streamed song ever by a female artist on Spotify.
Production on the next movie is said to have been fast-tracked by Sony, meaning Camila has a busy year ahead as she continues to work on her second solo album.
Cabello celebrated the news by tweeting a since-deleted photo of the cartoon Cinderella looking shocked, before sharing a photo of herself on a bench.
The best-known "Cinderella" movies been Disney's animated drama, released in 1950, and two live-action remakes: 1997's version starring Brandy and Whitney Houston, and the 2015 film with Lily James.