The Scottish actor will be digitally shrunk for the as-yet-untitled film, which will also star Hugh Jackman, Kate Winslet and Naomi Watts.
The plot sees Butler's character being kidnapped by Johnny Knoxville and Seann William Scott's on-screen baddies, who want to steal his treasure.
He tells Britain's Sunday Mail, "I play the most perverse, disturbing, disgusting, foul-mouthed leprechaun you could ever imagine. I've been kidnapped by Johnny and Seann so they can get their pot of gold. But they don't quite realise what they've bargained for."