Balan, 35, one of the most respected performers in India, is best known for her path-breaking roles in films like 'The Dirty Picture', 'Kahaani' and 'Parineeta'.
The other big names joining Spielberg are Oscar-winning actress Nicole Kidman, Oscar-winner Christophe Waltz, Japanese director Naomi Kawase, Scottish director Lynne Ramsay, French actor-director Daniel Auteuil and Romanian director Cristian Mungiu.
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"Vidya Balan on cannes jury... Awesome...," director Anurag Kashyap tweeted.
Director Shekhar Kapur and actress Sharmila Tagore have previously been a part of Cannes jury.
Cannes has invited India this year to celebrate 100 years of country's cinema.
Apart from Balan, actress Nandita Das is also a part of a separate jury for short films.
The festival will open on May 15 with 'The Great Gatsby', which also has megastar Amitabh Bachchan in a cameo. The actor will be attending the opening ceremony while the festival has extended a special invite to his daughter-in-law Aishwarya Rai, a regular at Cannes' red carpet.
This year, four Indian films have been selected in different non-competition categories at Cannes.
'Bombay Talkies', an anthology film by four directors --Kashyap, Dibakar Banerjee, Zoya Akhtar and Karan Johar -- will have a gala screening at the festival.
Kashyap will also be screening his 'Ugly' in festival's Directors' Fortnight sidebar where he earlier showcased his two-part revenge drama 'Gangs of Wasseypur'.
Dabba' (Lunchbox) and 'Monsoon Shootout', co-produced by Kashyap, have been selected for Cannes Critics Week and Midnight Screening sections respectively.
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