Fred Schepisi is tipped to direct Icon's adaptation of The Drowner.
The Impian and Icon co-production confirmed on its Facebook page that it was "getting very, very close to having a director" and linked to a report in Screen Daily about the appointment.
Based on the novel by Robert Drewe, The Drowner is a historical love story that follows a young engineer who travels from England to Western Australia to help build a pipeline from the coast to the gold fields.
The film has received backing from ScreenWest and Screen Australia and has an estimated budget of $50 million.
John Collee will pen the screenplay and the proposed cast includes Cate Blanchett, Emily Blunt, Liam Neeson, Barry Humphries and James McAvoy.
Last month, the film's Facebook page posted a picture of Schepisi discussing The Drowner with novelist Robert Drewe.
Schepisi only returned to the world of Australian film recently.
The upcoming Eye of the Storm has been adapted from the novel by Patrick White and is Schepisi's first local production since 1988's Evil Angels with Merryl Streep.
Eye of the Storm will be released in September and stars Judy Davis, Geoffrey Rush and Charlotte Rampling.