Jennifer Yuh Nelson, who directed Kung Fu Panda 2, will return for the latest outing in the Dreamworks Animation series.
Cranston joins newly-cast actors Mads Mikkelsen (Hannibal) and Rebel Wilson (Bridesmaids, Pitch Perfect), Deadline reports.
The trio will appear alongside Jack Black and Angelina Jolie, who will both reprise their roles in the franchise.
The film will be produced by Melissa Cobb, with Guillermo del Toro on board as executive producer. Jeffrey Hermann, Jonathan Aibel and Glenn Berger will serve as co-producers.
Kung Fu Panda 3 will open in US theaters on December 25, 2015 with a UK release date yet to be announced.
Cranston recently starred in the Oscar-winning film Argo, and is also busy developing new projects for television.
Watch Bryan Cranston and his Argo co-stars talking to Digital Spy below: