The actress is to star opposite Akshay Kumar in the gangster thriller, playing the Bollywood star Mandakini.
A source told Mumbai Mirror: "It is Sonakshi. She had been approached after Kareena walked out, but there were major date issues among other things.
"With Rowdy Rathore and Joker yet to be released, the actress wasn't sure if she wanted to do yet another film with Akshay and vice versa. Then again, Kangna's name started doing the rounds.
"However, after Ranveer's accident on the sets of Lootera, Sonakshi had a window of dates available, and finally agreed to do the film."
They added: "Sonakshi was in two minds about playing a character based on the Bollywood actress. That was coupled with the fact that she would have to ooze sexuality.
"However, all that has been taken care of now, and the makers have decided against the bold sequences. Sonakshi is perfectly happy with the film."
In November, Sinha said that she was born to act in Bollywood because of her family's industry background.
It was reported last year that the newcomer is dating her Lootera co-star Ranveer Singh.