The actor is said to have replaced Imran Khan, who was originally cast in the film adaptation of Chetan Bhagat's book.
A source told Mid Day: "Arjun Kapoor has been signed on to play the lead for the role. The deal happened on Monday night and the film will roll by the end year. The leading lady is yet to be finalised.
"Sajid Nadiadwala has bought the rights of the book from Chetan Bhagat and had initially planned to make the film with SRK (Shah Rukh Khan), which was to be directed by Vishal Bhardwaj. However, after it fizzled, Ranbir Kapoor stepped in and it was then decided to have a co-production with Karan Johar's company.
"After that Imran Khan stepped in. However, he also had to opt out due to date problems. Now Arjun Kapoor has been finalised for the film and he has signed the dotted lines."
Kapoor will play a Delhi boy who falls in love with a South Indian girl.
Abhishek Verman, son of veteran art director R Verman, will be making his directorial debut with the film, while Karan Johar will be producing it after Dharma Productions bought the rights to the novel.
Filming is due to begin in 2012.