Boyle, 50, became an overnight sensation in 2009 after her heartwarming rendition of "I Dreamed A Dream" on "Britain's Got Talent" became a massive hit on YouTube.
She has since sold more than 14 million albums.
"I never thought my life story would end up on the stage," the BBC quoted Boyle as saying. "A lot has happened in two years and it is a very exciting prospect. I hope everyone enjoys the show and I promise there will be a few surprises along the way."
The BBC said the musical is expected to start touring the United Kingdom in 2012.
"She is an inspiring woman and her story is an excellent one to tell -- someone with a raw talent, who surprises the world and overturns all the odds to make a new life for herself," producer Michael Harrison said.
"It's got all the qualities of a fairytale, but with the added bonus of being absolutely true."