The film is being produced by Paramount Pictures and Nickelodeon Films.
Patel joins the cast which features Noah Ringer, Nicola Peltz, Jackson Rathbone and Jessica Jade Andres.
The film is set to begin shooting this March in Greenland.
According to Shyamalan, Patel was "already one of the guys I was interested in. Then I saw Slumdog Millionaire, and the kid just grew in my eyes," he stated.
The actor will play the role of Zuko, a member of the Fire Nation.
The Last Airbender is slated for release on July 2, 2010.