Lagerfeld, Chanel’s creative director, will direct Knightley in the short film to mark the French fashion house’s 100th anniversary.
The film is due to be shot in the seaside town Deauville, where the first Chanel boutique opened in 1913, financed by Gabrielle “CoCo” Channel’s lover Captain Arthur Edward “Boy” Capel.
Knightley, 27, is already associated with the French fashion label as the face of the brand’s Coco Mademoiselle perfume campaign, which was banned last month for being “overtly suggestive”.
The actress was reported to have been handpicked by Lagerfeld to star in the advert, who has called her his muse. The designer is also rumoured to be working on Knightley’s wedding gown.
“Karl’s amazing. He’s an avid reader, and he speaks about five different languages, so he’ll be rattling off in English to you and in French to someone else, and in German to someone else and then the phone rings and he’s speaking Italian,” Knightley said about the designer last year.
Lagerfeld is reported to have ordered the crew to build “detailed retro sets” in the seaside resort where Chanel used to send her sister and aunt to parade through the streets wearing her creations to attract customers.
The film will also include model Stella Tennant and actress Tallulah Harlech, as well as French actress Clotilde Hesme, model Brad Kroenig and his four-year-old son Hudson, who is Lagerfeld’s godson.
Lagerfeld’s film, to be screened at Chanel’s Cruise Show at Singapore in May, is one of a host of recent films made about the label’s founder, including Coco Before Chanel (2008) and Coco Chanel Igor Stravinsky (2009).