The American actress, best known for her Oscar-winning role in Terms Of Endearment, will play Lady Grantham's (Elizabeth McGovern's) mother.
Downton's executive producer Gareth Neame said: "My late grandfather directed Shirley MacLaine in Gambit in 1966 so it is a delight for me that she will be joining us on Downton Abbey.
"Julian has written another brilliant character in Martha Levinson, who will be a wonderful combatant for Maggie Smith's Dowager Countess and we are excited at the prospect of Shirley MacLaine playing her."
The irreverent actress whose illustrious career comprises more than 50 feature films will join the cast on the set of of Julian Fellowes' Golden Globe Award-winning period drama next month, when filming for series three gets underway.
The next instalment will be set in the 1920s and McGovern recently revealed to The Sun that, along with it having a Stateside feel, there will also be two weddings on the cards. However, she didn't say if they would be upstairs or downstairs nuptials.
Laura Mackie, Director of Drama at ITV said, "It is so exciting to have an actress of Shirley MacLaine's stature joining our brilliant Downton Abbey cast for series three and a tribute to the show's success on both sides of the Atlantic."