Production will begin next month in Paris under the direction of Anne Fontaine. Fontaine co-wrote the script with Camille Fontaine and Christopher Hampton.
Audrey Tautou has been signed to portray Chanel, who was credited with revolutionising women's fashion in the 20th century.
The director said in a statement: "Audrey Tautou embodies all the qualities that made Coco such a fascinating individual, and the support we've received from The House of Chanel is incredibly gratifying."
Chanel's art director Karl Lagerfield will supervise the recreation of the film's wardrobe.