Lohan, 25, is the first cast member named for Liz & Dick, based on the true story of Taylor's passionate romance with actor Richard Burton, whom she married and divorced twice.
"I have always admired and had enormous respect for Elizabeth Taylor. She was not only an incredible actress but an amazing woman," Lohan said.
Taylor, widely recognised for her beauty and glamour, met Burton on the set of the 1963 film Cleopatra and thus began a passionate and tumultuous romance that made headlines worldwide.
Lohan had talked about her role in the TV movie last month and posted a picture of herself dressed as Taylor as her Twitter profile. But there had been no official confirmation from the network until now.
The Mean Girls actress has been striving to turn around her bad-girl image after being in and out of jail, rehab and court since 2007. She was released in March from almost five years of formal probation stemming from a 2007 arrest for drunk driving and cocaine possession.
She recently landed a guest spot on the hit TV musical comedy Glee.