Dan y Wenallt, starring Rhys Ifans and Charlotte Church, was chosen by Bafta as the UK's entry for the Best Foreign Language Film award.
Submissions will be shortlisted in December, with the final five nominees announced in January 2016, ahead of the ceremony in February.
Director Kevin Allen said he was "absolutely thrilled".
"It's a shot in the arm for both versions of our back-to-back Under Milk Wood productions," he said.
A partnership between fFatti fFilms, Tinopolis, Ffilm Cymru Wales, Goldfinch Pictures and S4C, it was the first film adaptation of the play since 1972, with both Welsh and English language versions filmed at the same time.
Two previous S4C foreign language film submissions have led to nominations - Hedd Wyn in 1994 and Solomon a Gaenor in 2000.
The Welsh film adaptation of poet Dylan Thomas's Under Milk Wood will be submitted for the Oscars.