The film, based on Patricia Highsmith's novella The Price of Salt, tells the story of a lesbian romance in the 1950s.
"We are thrilled to be working with Cate Blanchett and Mia Wasikowska, two of the most talented actors working today, in this striking adaptation of one of the 20th century's most iconic writers, Patricia Highsmith," read a joint statement from co-producers Elizabeth Karlsen and Stephen Woolley.
"To be re-united with highly talented individuals, director John Crowley and writer Phylis Nagy is a testament to the quality of the project. We are delighted to have such a gifted team on board."
Karlsen and Woolley will oversee the project's development through Number 9 Films, in conjunction with Film4.
"Carol is a beautiful and heart-breaking story and it's a testament to the talents of Phyllis and John that we've attracted actresses of Cate and Mia's calibre to star at the heart of it," said Film4's Tess Ross.
"We are delighted to be working with Liz and Stephen at Number 9 to help put together what promises to be a truly wonderful film."
Carol is scheduled to begin filming in London and New York starting February 2013.