Stated to be a big budget film with top star cast, the movie will be a joint production between state-run China Film Group and India's EROS.
An agreement in this regard will be signed during Modi's three day visit starting from May 14.
Modi would kick off his visit from Xian city, the capital of President Xi Jinping's home province Shaanxi, where the Chinese President is expected to accompany Prime Minister Modi to the Wild Goose Pagoda built in recognition of the Monk's contribution in popularising Buddhism in China.
The Indian cast may include mega star Amitabh Bachchan.
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The shooting for the film is expected to begin on May 25, officials here told PTI.
Both the Shanghai Film Group and Eros are expected to sign an agreement to do more co-productions in the future.
Already, a movie titled "Kung Fu Yoga" featuring Hollywood star Jackie Chan is being made under the joint production.
Aamir, 49, who is the most popular Indian film actor in China -- thanks to the success of "3 Idiots" -- will visit Beijing and Shanghai on May 11 and 12 for the premiere with director Rajkumar Hirani and Vidhu Vinod Chopra.
Aamir is also expected to make an appearance with Hollywood actor Jackie Chan on May 14 during an event at the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).
The film will be released in over 3,000 screens in China on May 22.
Famous Chinese comedian actor Wang Baoqiang has rendered his voice for Aamir's alien character in the movie to highlight the comic element.