The 25-year-old blonde - who plays rebellious Lady Rose in the hit ITV period drama - would star as heroine Natasha Rostova, the part taken by Audrey Hepburn in the 1956 film version of Leo Tolstoy's classic novel.
American actor Paul Dano - whose films include There Will Be Blood and 12 Years A Slave - will play her lover, Pierre Bezukhov, an illegitimate son who rises in society, according to Deadline.
Award-winning scriptwriter Andrew Davies, whose previous TV adaptations have included Jane Austen's Pride And Prejudice and Charles Dickens's Little Dorrit - is writing the series.
He previously said of the project: "War And Peace is not just a great novel, it's a wonderful read and it'll make a wonderful serial.
"A thrilling, funny and heartbreaking story of love, war and family life. The characters are so natural and human and easy to identify with, and Natasha Rostova just beats Lizzy Bennet as the most lovable heroine in literature."
James will next be seen starring on the big screen in Cinderella, Disney's live action adaptation of the classic fairytale, directed by Sir Kenneth Branagh.
War And Peace, produced by The Weinstein Company as part of its new venture into European TV, is due to air on BBC One next year.