A nice 100% cotton will be best (and cheap, too!). It fits all your criteria: cotton doesn't wrinkle easily, is very easy to sew, and will only shrink in the first washing. Kimono are traditionally made out of silk or silk brocade, but that will be A) very expensive and B) not very warm.
Your sister is definitely going to want to wear some warm underclothes with this costume, no matter what you make it out of, though.