She shared the news on her Facebook page, saying the cartoon was a "big part of growing up".
The film will be directed by Bill Condon, who previously made Twilight: Breaking Dawn Parts 1 and 2.
The animated version of Beauty and the Beast was released in 1991 and received six Academy Award nominations.
There is currently no release date for the new version.
Revealing the news, Watson said: "I'm finally able to tell you... that I will be playing Belle in Disney's new live-action Beauty and the Beast!
"It almost feels surreal that I'll get to dance to 'Be Our Guest' and sing 'Something There'. My six-year-old self is on the ceiling. Heart bursting."
We know Emma Watson acts, we know she models and we know she's a UN Women Goodwill Ambassador. But singing?
She admitted herself that it's "time to start some singing lessons".
This won't be the first time a Disney classic is being made into a live action movie and could be seen as part of a new trend for the studio.
2015 sees the release of Kenneth Branagh's Cinderella, with Downton Abbey's Lily James playing the title character.
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Emma Watson has confirmed she's to play Belle in a live action version of Disney's Beauty and the Beast.