The musical is written and directed by Whiplash's Damien Chazelle.
Chazelle said he was "thrilled and honoured" by the festival's invitation.
"It is deeply humbling for us to join the company of their previous opening night films, and we could not be more excited to share our movie with the audience in Venice," he said.
The film also stars JK Simmons, who won an Oscar for best supporting actor for his performance in Whiplash, and singer John Legend.
Festival director Alberto Barbera called the film "a surprising tribute to the golden age of American musicals, from An American in Paris by Vincent Minnelli to New York, New York by Martin Scorsese".
"It is a film that does not merely reinvent the musical genre, it gives it a brand new start.
"If Whiplash was the revelation of a new filmmaker, La La Land is his definitive, albeit precocious, consecration among the great directors of Hollywood's new firmament," he said.
The festival screening of the film, on 31 August, will be the film's world premiere.
The musical is described as a modern take on the classic Hollywood romance, with spectacular song-and-dance numbers.
It follows a love affair between Mia, an aspiring actress played by Emma Stone, and Sebastian, a struggling jazz musician played by Ryan Gosling.
The film will be in competition for the festival's Golden Lion award.
British director Sam Mendes will head the jury at this year's festival which runs from 31 August until 10 September.
La La Land, starring Emma Stone and Ryan Gosling, is to open the 73rd Venice International Film Festival.