In the film, to be directed by Ayan Mukerji, Bachchan will be playing a pivotal role.
"He has given his nod for the film. It's a full fledged role and not a guest appearance. It's an important role. He will begin shoot this year itself," sources said without giving details of Bachchan's role.
This is the first time that the megastar and Ranbir will be teaming up for a film.
The "Piku" star has worked with Ranbir's father and actor Rishi Kapoor in films like "Amar Akbar Anthony", "Coolie", "Naseeb", "Ajooba" among others.
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The "Wake Up Sid" helmer is reportedly planning a three-film franchise of "Dragon", but only if the first part succeeds.
The 74-year-old star will be next seen in Ram Gopal Varma's "Sarkar 3" that releases on April 7. After that, he has Vijay Krishna Acharya's "Thugs of Hindostan" in which he will for the first time share screen space with Aamir Khan.
Ranbir, meanwhile, has "Jagga Jassos" and the biopic on Sanjay Dutt which will be helmed by Rajkumar Hirani.