The murder of Reena Virk by white teenagers had made international headlines 13 years ago, leading to calls for stricter juvenile justice laws in Canada.
Witherspoon's company Type A Films and two Canadian production companies, Brightlight Pictures and Rhombus Media, will jointly produce the film to be called "Under the Bridge".
"We are committed to bringing `Under the Bridge' to the big screen and making a film that does this story justice, " Type A Films said in a statement here Tuesday.
In what remains Canada's most famous teen murder case, the Indian-origin girl was beaten unconscious and then drowned by eight white teenagers in November 1997.
Many Indo-Canadians saw racism in the attack as seven white girls and a boy, aged 14 to 16, had repeatedly bashed and then drowned Virk in a gorge on the outskirts of Victoria - which is the capital of British Columbia province.
Her body was found floating in the water a week later. Of the eight accused, the six (all girls) were given minor sentences and released.
The only boy, Warren Glowatski, was sentenced for life in 1999, but has been released on day parole since. Kelly Ellard, the last accused, was put behind bars for life last year.
The Virk family came to Canada from Ambala city in Haryana in 1979.