The announcement was made in Burbank, Calif., by Jeff Robinov, Warner Brothers Pictures president of production.
Watanabe, who is nominated for a best supporting actor for his performance in "The Last Samurai," will play the villainous Ra's Al Ghul.
Also starring in the film will be Christian Bale as Bruce Wayne-Batman; Michael Caine as his trusted butler, Alfred; Katie Holmes as a childhood friend of Wayne's; Liam Neeson as Wayne's mentor, Henri Ducard; and Morgan Freeman as Lucius Fox, a former board member and sidelined employee of Wayne Enterprises.
Directed by Nolan from a screenplay by David Goyer, the movie is scheduled to start production in London in March.
The film, which explores the origins of the "Batman" legend and the Dark Knight's emergence as a force for good in Gotham, will be released in 2005.