Lily, 22, will play the role of Snow White in the 3D film opposite Julia Roberts, who will star as the Evil Queen.
Lily's first major movie role was opposite Sandra Bullock in The Blind Side.
According to UK newspaper Daily Mail, Lily said: 'Snow White was my favourite fairytale [growing up], and when I first read about the project, I was like, I have to get in on this. It's such an iconic character.'
A pal added: 'She is absolutely thrilled.'
The Social Network star Armie Hammer will be taking on the role of the Prince in the movie - set to be called The Brothers Grimm: Snow White.