The actress, whose family are based in the London borough of Finchley, will also act in the project, Mumbai Mirror reports.
A source close to the actor commented: "She would have turned producer some time ago but she decided to save the moment and use it for her sister's benefit."
Kaif's younger sibling has recently completed drama training in preparation for her industry launch. The source added: "Isabel has finished attending acting school in the US and Katrina will now take the plunge."
Additionally, the Welcome star revealed that she plans to educate her sister on the history of Indian cinema.
"When I came to Bollywood, I couldn't tell Sholay from Mughal-e-Azam," former model Katrina said.
