The singer will don traditional Indian dress and a red bindi dot for her appearance in the movie Blue.
Joining established actor Akshay Kumar, Mingoue will become the first international star to appear in an "item number", the traditional Bollywood dance.
"I've heard Kylie moves as sweet as she sings, so it's back to the rehearsal room for me," Kumar told Hello.
The song was penned by A.R. Rahman, who wrote the Oscar-winning soundtrack to Slumdog Millionaire.
Blue is expected to become the most expensive Bollywood movie of all time with a budget of £20 million, according to The Sun.