The Hindi actor has described being hired by the director as a "dream come true", and will be joined in the movie by fellow Indian Freida Pinto.
Kher will play Pinto's father in the flick, which is yet to be officially named.
"Last year I worked with another international filmmaking legend, Ang Lee. Now, Woody Allen. What more could any actor ask for in his 25th year in the business?" said Kher.
Allen has informed the 54-year-old that his character and the plotline will only be fully revealed to him immediately before filming.