Burton was linked to the live action project last year, but now it appears he's dropped out and Downey Jr is keen to bring his "Tropic Thunder" co-star onboard, reported Deadline.
The "Iron Man" star will take on the role of master puppeteer, Geppetto - the woodcarver who creates Pinocchio -in the movie.
The Downey Jr project isn't the only Pinocchio film in the works - director Guillermo Del Toro has been working on his vision of Carlo Collodi's classic tale since 2008.