He will be joining Al Pacino, Kelly Preston and John Travolta as the notorious New York criminal, Variety reports.
Liberty Heights director Barry Levinson will be rewriting the script from Analyze This writer Leo Rossi ahead of shooting.
Foster said: "Barry Levinson was the first director who took a chance on me. I have a career because of him.
"I am deeply honoured for the opportunity to work with Barry and the amazing cast he is assembling to help bring the story of the Gotti family to the screen."
John Gotti Jr will be consulting on the project which centres on Travolta's character's heading of the famous crime clan.
The film has already generated controversy, with speculation that Lindsay Lohan is to play a leading role.
Joe Pesci, meanwhile, is planning to sue production company Fiore Films after it allegedly used his name to generate buzz about the project.
Foster is also signed up to Ridley Scott's sci-fi film Prometheus.