The British actor will join Ben Stiller, who returns as security guard Larry Daley and Robin Williams as Theodore Roosevelt.
The 31-year-old will play famous knight Sir Lancelot, of the King Arthur's Knights of the Round Table, who is being portrayed as the main villain in the sequel.
There is no plot available for the Shawn Levy (The Internship, The Pink Panther 2, The Real Steal) film which follows the adventures of Daley, who after struggling to find a job, lands one as a security guard at the American Museum of Natural History in New York City and D.C.'s Smithsonian Museum.
This time around, the film will be based in London, England.
In the second installment, Daley infiltrates the Smithsonian Institution in order to rescue Jedediah and Octavius, who have been shipped to the museum by mistake.
Sir Lancelot is the favorite knight of King Arthur, who gave him his friendship and protection only to be betrayed by him, when Lancelot had an affair with the Queen, Guinevere.
Dan Stevens has been working on several independent films since leaving the internationally acclaimed hit series Downton Abbey.
He starred alongside Dominic Cooper and Emily Browning in the period drama Summer In February which had a limited release in England and is yet to come to US shores.
Stevens recently joined Benedict Cumberbatch (Sherlock, The Hobbit: The Desolation Of Smaug) in the dramatization of
Dan Stevens created a firestorm of controversy when he decided to leave Downton Abbey at the height of its popularity, leading writer Julian Fellowes to kill his character, Matthew Crawley, in the last scene of Season 3.
This left fans heartbroken, especially in the UK, where the fateful episode was aired on Christmas Day. Many haven't forgiven the handsome blue-eyed star for his actions.
Stevens said he was ready to pursue other opportunities in the US and left for New York City and a stint on Broadway playing in a revival of The Heiress opposite Jessica Chastain (Zero Dark Thirty).
In the popular franchise A Night At The Museum historical figures displayed at the museum come to life to create havoc for Larry Daley, the night guard.
It is unclear if other stars of previous installments of A Night At The Museum such as Owen Wilson and Steve Coogan will come back to join Dan Stevens.