Diana, a humanitarian and the ex-wife of Prince Charles, died at age 36 in August 1997. The film takes place over a holiday weekend in the early 1990s when Diana decided to leave her marriage to Charles.
Spencer is written by Steven Knight (Eastern Promises) and produced by Jackie director Pablo Larraín. FilmNation will introduce the film to potential buyers during the Cannes virtual market next week.
Stewart is known for playing Bella Swan in the Twilight movies and has since starred in such films as Clouds of Sils Maria, Still Alice, Personal Shopper and Charlie's Angels.
"Kristen is one of the great actors around today," Larraín told Deadline. "To do this well, you need something very important in film, which is mystery. Kristen can be many things, and she can be very mysterious and very fragile and ultimately very strong as well, which is what we need."
"I think she's going to do something stunning and intriguing at the same time," he added. "We're very happy to have her, she's very committed."
Emma Corin will play Diana in Season 4 of the Netflix series The Crown.