The modern musical version of the classic fairytale is directed and written by Kay Cannon.
Menzel is poised to play Evelyn, the evil stepmother. The report comes after news that "Pose" star Billy Porter is in negotiations for the role of the fairy godmother, reports variety.com.
The stepmother's role, also known as Lady Tremaine, is based on the original character from the fairy tale created by Charles Perrault in the 17th century.
"Cinderella" is set to shoot in London in February next year. The Sony musical is will open on February 5, 2021.
Cabello came on to the project in April. She will be involved in the music for the project, which grew out of an original idea from James Corden. The film will be produced by Corden and Leo Pearlman through their Fulwell73 banner.
The new "Cinderella" will be a music-oriented version of the traditional tale of the orphaned girl with an evil stepmother. Disney's 1950 animated drama has received two live-action remakes: 1997's version starring Brandy and Whitney Houston and Kenneth Branagh's 2015 version with Lily James. The latter grossed $543 million worldwide.
Menzel originated the role of Maureen Johnson in "Rent" for which she received a 1996 Tony nomination, and she originated the role of Elphaba in "Wicked", for which she won a 2004 Tony Award.
She is best known as the voice of Elsa in Disney's "Frozen" franchise, the sequel to the $1.2 billion-grossing hit will release on November 22. She sang the Oscar and Grammy winning song "Let it go". Her other film credits include "Enchanted" and upcoming "Uncut Gems".