"Sharad has the ability to emote extremely well and he fits the character of the negative lead that I want in 'Bhoomi'. It is a great opportunity for Sharad to show his menacing side," Kumar said in a statement.
The film is a revenge drama, which marks Sanjay's return to filmdom after he completed his jail term.
"Bhoomi", which delves into a father-daughter relationship, will see Sanjay in the role of a father, while Aditi Rao Hydari will play his daughter.
Set to go on the floors from February in Agra, the project is produced by T-Series and Legend Studios. It is slated to release on August 4.