Speaking to Deadline, director Pablo Larraín is eyeing up the movie as a potential Cannes candidate with a short, yet unique narrative that spans just three days.
Covering a "critical" weekend in the early 1990s, the film will look at how Diana finally decided that her marriage to Prince Charles simply wasn't working, and how she came to her decision to finally leave him, and her position in the royal family.
"Kristen is one of the great actors around today," Larraín told the publication.
"To do this well, you need something very important in film, which is mystery. Kristen can be many things, and she can be very mysterious and very fragile, and ultimately very strong as well, which is what we need."
The director went on to say that the combination of those elements made him think of Kristen, who he predicts will do something “stunning and intriguing” in the film.
According to the publication, the film won't go into Diana's death which occurred in 1997, rather, it will delve into her "ferocious" love for her sons William and Harry.
"Diana is such a powerful icon, where millions and millions of people, not just women, but many people around the world felt empathy toward her in her life," Larraín said.
He explained that the story is about identity – a woman who decides to be the woman she was prior to marrying her husband, a man who would be King someday
With a script written by Steven Knight, the story aims to capture and inspire the "enormous amount of beauty in the power of Diana".
The film is yet to commence production, but Larraín is working very hard to get it made - stay tuned!