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The 18-year-old will play impetuous noblewoman Betsy Balcombe in the movie, to be directed by Benjamin Ross from his own script.
The character becomes trapped on the isolated British Isle of St. Helena, where she falls in love with the exiled Napoleon.
Johansson dropped out of the role when it was deemed more suited to a younger actress, but will still produce alongside Alexandra Milchan, Melanie Sloan and Gilles Arondeau.
Watson will shoot the film this autumn, before work starts on Harry Potter and the Deathly Hallows, claims The Hollywood Reporter.
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