Alec Baldwin, Ellen Page and Penelope Cruz have already signed for the movie, which is currently titled Bop DeCameron.
Álvarez's role in Allen's next feature is not yet known, according to ScreenDaily.
The actress previously worked with Cruz's husband Javier Bardem in Biutiful, director Alejandro González Iñárritu's grim portrait of a dying man struggling to rectify his life's many sins.
Allen will appear in front of the camera for the first time since 2006's Scoop for his latest project, playing what is believed to be a man travelling with his wife to Italy to meet his daughter's fiancé for the first time.
Bop DeCameron will also reunite Allen with Judy Davis, who previously starred in the director's Alice, Husbands and Wives and Deconstructing Harry.
Midnight in Paris - Allen's 41st feature film - is currently on limited release in US cinemas.
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Watch the trailer for Midnight in Paris below: