The Daily Mirror reports that the Duke and Duchess of Sussex risk furthering the rift with Buckingham Palace with their plans.
Harry, 35, and wife Meghan, 39, have signed a mega deal with the US streaming giant that could include a film about Diana.
The coulee are said to have held discussions over the potential documentary as part of their $150million production contract.
A source told the Mirror: “The Sussexes are discussing making a feature documentary on Princess Diana’s family history and heritage.
“It is early stages but it is looking like it could happen.
“It will work as a tribute to Diana and build on all the incredible charity work she has done. Netflix would also love to make a documentary about Diana and it is something they have been pushing for.”
The move could further a rift between Harry and his brother, William.
The pair have spoken candidly about moving “on different paths” after reports emerged last year of a frosty relationship.
The source added: “William and Harry have a difficult relationship and they haven’t spoken for three months.
“These plans could further antagonise their fallout. If it does happen William will be the first to know.”
It comes only days after the anniversary of Diana’s tragic death.
Her passing plunged the country into mourning and she left behind an incredibly legacy.
The princess – aged only 36 when she died in a Paris car crash in 1997 – helped changed the world’s perception of AIDS when she held the hand of a man suffering with HIV in 1992.
Her sons have reportedly been on bad terms for months.
Speaking about the rift last year, Harry told ITV that “inevitably stuff happens” as a result of “this family being under the pressure that it is”.
It was followed Harry admitting the brothers have “good days and bad days”.
He added: "We are brothers. We will always be brothers.
"We are certainly on different paths at the moment, but I will always be there for him as I know he will always be there for me."
Harry and Meghan signed on this week to an unprecedented production contract with the US streaming giants.
The Sussexes will produce a host of “impactful” content in the shape of feature films, documentaries, children’s and scripted television.