The new film follows 2019's remake and will be directed by Oscar winner Barry Jenkins (Moonlight, If Beale Street Could Talk).
Jeff Nathanson will pen the screenplay having written the previous instalment, which grossed more than £1 billion at the box office.
A plot for the sequel is to be revealed but Deadline reports that "the story will further explore the mythology of the characters, including Mufasa’s origin story."
Jenkins said: “Helping my sister raise two young boys during the ’90s, I grew up with these characters.
“Having the opportunity to work with Disney on expanding this magnificent tale of friendship, love and legacy while furthering my work chronicling the lives and souls of folk within the African diaspora is a dream come true.”
A title, cast, release date and further details - including whether or not the sequel will be a musical - are to be confirmed.