The 25-year-old actress, who is trying to build her career after a troubled past, will star opposite porn star James Deen in the film, which is written by Bret Easton Ellis and is set to be directed by Paul Schrader, reported Ace Showbiz.
"James Deen and Lindsay Lohan will star in 'The Canyons'. And I am beyond thrilled that James Deen and Lindsay Lohan will be playing the parts of Christian and Tara in the film," Ellis posted on Twitter.
The writer, who recently admitted he's strongly interested in adapting "Fifty Shades of Grey", said that "The Canyons" will kick off its production in July.
"Shooting 'The Canyons' starring James Deen and Lindsay Lohan: July 9-31 in LA. Could not have dreamed of a better cast. Lindsay nailed it," he added.
The story itself revolves around sex and crime among a group of twentysomethings in Los Angeles. Adult film star Deen will play a "manipulative trust-fund kid with dreams of making a movie," while Lohan will star as his girlfriend who is addicted to a materialist lifestyle.
Lohan is currently shooting for TV drama 'Liz & Dick' where she plays legendary actress Elizabeth Taylor.