The filmmaker has been approached by Scott Rudin Productions and Pascal Pictures, according to The Hollywood Reporter.
The movie will be based on Stacy Schiff's best-selling book, "Cleopatra: A Life", which paints the Egyptian ruler as a shrewd negotiator and powerful female figure that shaped human history in her short life.
Scribe David Scarpa has penned the screenplay.
Sony Pictures has long battling to get the Cleopatra film out and with Villeneuve almost onboard the studios' pet project seems one step closer to production.
Directors including Ang Lee, David Fincher and James Cameron have been considered to helm the period epic.
In 1963, legendary actor Elizabeth Taylor had essayed the titular role in "Cleopatra".