It will be the first new competitive category at the ceremony since best animated feature was added in 2002.
Casting directors have campaigned in recent years to be recognised in the way other film crafts like sound, costume and hair and make-up are.
In a statement, Academy bosses said casting directors “play an essential role in filmmaking”.
Academy CEO Bill Kramer and president Janet Yang continued: “As the Academy evolves, we are proud to add casting to the disciplines that we recognise and celebrate.
“We congratulate our casting directors branch members on this exciting milestone and for their commitment and diligence throughout this process.”
The category will not be introduced until the 2026 ceremony because of how far in advance awards campaigns are planned.
The move comes despite the Academy’s efforts to shorten the Oscars ceremony in recent years in an effort to keep viewers interested. Often, the show runs well over its scheduled three hours.
Currently, 23 awards are given out at the Oscars – although generally the public are mainly interested in the major prizes such as best picture, the acting categories and best director.
The Academy did not confirm whether the new casting category would be included in the telecast, and a decision will likely not be made until nearer the time.
Casting directors are among the earliest staff to be involved in new film projects, playing a key role in shaping major Hollywood films.
They are in charge of hiring A-list stars who will front a film as well as the performers who appear in smaller roles.
Stunt performers have also been campaigning for their own category at the Academy Awards, but have not yet been successful.
One of the key precursor ceremonies, the Screen Actors Guild (SAG) Awards, introduced a stunt category in 2007. Last year, it was won by the team who worked on Top Gun: Maverick.
Responses to the news of the casting category have been much warmer than that of the popular film category, which the Oscars attempted to introduce in 2018.
The proposed prize was a populist move designed to recognise films that had been successful at the box office but were less likely to be nominated in the traditional categories, such as summer blockbusters and superhero franchises.
However, the move prompted criticism, as many high-profile industry figures said such a category would dilute the prestige and integrity of the Oscars.
Instead, the Academy a few years later experimented with a “fan favourite” prize, a viewer vote that was not strictly a formal Oscars category. It was won by Zack Snyder’s Army of the Dead but was not repeated the following year.
Earlier this year, the Golden Globes introduced a box office achievement prize, which went to Greta Gerwig’s Barbie, ensuring the film was recognised despite losing some of the major categories.
This year’s Oscars ceremony, hosted by Jimmy Kimmel, will be held in Los Angeles on 10 March.
After the casting prize was announced, the three governors of the Academy’s casting directors branch – Richard Hicks, Kim Taylor-Coleman and Debra Zane – thanked the Academy.
“This award is a deserved acknowledgment of our casting directors’ exceptional talents and a testament to the dedicated efforts of our branch,” they said.
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