The 16-year-old model - who is the daughter of Cindy Crawford and Rande Gerber - has already worked with the design legend by walking in two Chanel shows, and will now take their professional relationship further by creating a ready-to-wear line and accessories, which will arrive in stores in September, WWD revealed.
Pier Paolo Righi, chief executive officer of Karl Lagerfeld, said they are excited by the venture.
Pier said in a statement: ''When Karl first told us his idea to collaborate with Kaia, we were all excited by the incredible potential and power of bringing their two worlds together.
''We have been working intensely over the last months with Kaia in LA and at our studio in Paris. It was exciting to see her clear vision, passion and engagement, and the collection will definitely inspire many young women.''
The collection will team Karl's Parisian chic with Kaia's West Coast style, with the eveningwear having a European influence and daywear inspired by the Californian look.
The new range, which will also include jewellery, sunglasses and shoes, will launch through a number of events in Los Angeles, New York and Paris in the autumn.
Kaia recently admitted her famous mother has given her a lot of helpful advice since she embarked on her own catwalk career.
She said: ''She gives me advice for life more than modeling, like 'Be on time,' which is really important in the industry we're both in.
''And to be kind to everyone. Everyone that I've worked with says she's the most professional person that they work with, so I could only hope that they say the something about me.''
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