The two stars will be meeting up when Hollywood writer-director Willard Carroll finally begins rolling the cameras for his long-touted movie Marigold, told Khan.
"The shooting starts next week," said Khan, adding that parts of the movie would also be made on location in the resort state of Goa and in Mumbai, home to its prolific Hindi-language film industry known as Bollywood.
Macho actor Khan plays a choreographer in the film, in which Larter, who has gone on to make a name for herself in Legally Blonde, House on Haunted Hill and teen thriller Final Destination, plays an arrogant American actress stranded in India.
During her ordeal, the actress hires Khan - who has played in dozens of Bollywood hits including Tere naam and Hum Dil De Chuke Sanam, as her Bollywood dance instructor, and the two fall in love.
Khan said the movie was full of drama, humour and emotion. It will be made only in English.
"I am playing the role of a choreographer in the film, but I cannot say anything more than that at this juncture," he added.
Marigold will also feature Nandana Sen, daughter of Nobel economics laureate Amartya Sen, in a key role.
"I am happy to be a part of this light-hearted film," Sen said.
"I always wanted to do something like this. I have met Ali Larter. We all are looking forward to complete this film as soon as possible."
Sen made her debut in Bollywood last month with the critically acclaimed film, Black.
Khan is one of Bollywood's most controversial actors known for his off screen tempers and volatile love affairs.An allegedly drunk Khan made headlines in 2003 after a pedestrian died and four others were injured when his imported Toyota ran over sleeping homeless men in Bombay's Bandra suburb. The case had delayed filming of Marigold, sources said.
Prior to the hit-and-run case, Khan was in the news for allegedly beating former Miss World and Bollywood actress Aishwarya Rai with whom he had a long affair. The two worked together in Hum Dil De Chuke Sanam.
Marigold will be Hollywood's first major movie in India in years, although there have been a slew of cross-over movies made by Indians in the last few years.
Caroll is best known for directing Playing by Heart with Sean Connery and Angelina Jolie.
