The Israeli-American actress, who won a best actress Oscar in 2011 for her role in ballet drama "Black Swan," will also play Oz's mother, who committed suicide when he was 12.
"She (Portman) read 'A Tale of Love and Darkness' and asked me for the rights to make a film adaptation around five or six years ago," Oz told Reuters by telephone.
"I agreed because of my high esteem for her work. She's an excellent actor."
"A Tale of Love and Darkness" recounts Oz's childhood in war-torn Jerusalem in the 1940s and 1950s, his mother's death and his journey through a kibbutz and Israel's shifting politics after the birth of the nation.
Oz said that he has been helping prepare the script, and Portman was likely to come to Israel in September for film preparations and begin shooting in January.
Portman's publicist was not immediately available to comment.
Portman, 32, was born in Jerusalem to an Israeli father and an American mother, but was raised in the United States. Her first feature film role was 1994 thriller "Lon: The Professional" and her breakout role came in her teens as Queen Padm Amidala in "Star Wars: Episode I - The Phantom Menace."
Apart from her Hollywood career, the Harvard-educated, Hebrew-speaking actress has also worked in Israeli film.
(Reporting Dan Williams; writing by Mary Milliken; editing by Eric Kelsey and Cynthia Osterman)
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