Uglydolls, created by the husband and wife team David Horvath and Sun-Min Kim, will be spun into a feature-length film Deadline reports.
Chris Meledandri, producer at Illumination said: "I remember the immediate appeal and connection that the characters had for me. They are simple in design, expressive in personality, and once I got to know David and Sun-Min, I learned there was a mythology and a world behind this.
“The personality and level of wit reminded me of the illustrated work I saw from Matt Groening before he did The Simpsons. The characters have a cult following, and they've been very restrictive in where and how they've sold them.
"It has been a small cottage industry, but it seems just right for us in terms of the potential for a growth curve.”
Illumination Entertainment is the studio behind Despicable Me and Hop, and holds the rights to Ricky Gervais’ Flanimals.
Its animators are currently developing a stop-motion Addams Family film with Tim Burton, with an adaptation of Dr Seuss’ The Lorax also in the works.