There’s a discussion and related example over at the Next.js GitHub project. It sounds like that example achieves what you want to do. tl;dr:
<div className="h-64 w-96 relative"> // "relative" is required; adjust sizes to your liking
<Image
src={img.img}
alt="Picture of the author"
layout="fill" // required
objectFit="cover" // change to suit your needs
className="rounded-full" // just an example
/>
</div>
The image will preserve its original aspect ratio and fill / cover (or whatever object-fit you chose) the size of the outer div, which you can set using Tailwind classes. Other styles, like rounded corner, can be applied to the Image.