'The story of Olivia Newton-John will chart her remarkable path through one of the world's toughest industries, and provide a glimpse into the extraordinary achievements of one of Australia's most loved icons,' the statement read.
While Delta and Olivia have performed duets together in the past, it's been reported the celebrities have feuded for years.
The unknown source also added: 'She can't believe they've chosen Delta, someone she believes cannot act. She's furious her legacy is being tampered with.'
The Grease star is also believed to be worried The Voice judge will use the biopic as a platform to release an album full of cover songs.
While filming is due to start this month, the article claimed Delta asked for her 'idol's blessing' before taking on the role.
Daily Mail Australia have contacted both parties for comment.
In December, sources claimed the 68-year-old star had objected to the biopic and even made attempts to block it's production.
New Idea reported that the seasoned actress was doing 'everything in her power' to shut down the project.
The magazine further claimed that Olivia issued Fremantle Media, which is producing the film, with a cease and desist letter.
'(Olivia's) very upset and is not taking (Delta's) calls,' the insider said. 'She expects Delta to publicly disassociate herself from the movie before she'll talk to her again.'