The Kath and Kim Filum, which is created by and stars Gina Riley and Jane Turner, will be produced by Rick McKenna and directed by Ted Emery and is scheduled to start filming in Italy from September 16.
Riley told the Herald Sun that Richard E Grant has accepted a role in the movie, saying: "We sent Richard the script and he came back and said, 'I would love to be a part of it.' We love him. He is perfect for Kath and Kim."
Former cast members such as Magda Szubanski are also believed to be returning for the new movie.
Szubanski recently parted ways with Jenny Craig after being the face of the weight loss company for three years. She shed 25kg during that time and said that she now has a "sense of pride".
Last year, Riley and Turner agreed to take part in the Sydney Film Festival. Soon after, rumours of a Kath and Kim movie began to surface.
Watch some Kath and Kim highlights below: