The film will be a dark comedy set in an alternate universe where humans and puppets coexist, reports Deadline.
In the wake of a series of murders of puppets from an '80s television show, a detective puppet tries to solve the case.
The late Jim Henson's son Brian Henson (A Muppet Christmas Carol) is directing the movie, and Todd Berger (Kung Fu Panda 2) has penned the script.
There is no word yet on what character Heigl will be playing.
Heigl can currently be seen in her latest film One for the Money, currently in US cinemas and released in the UK on February 24.
Watch the trailer for One for the Money below: