The film will be adapted from the non-fiction book about Milligan, who was the first person to successfully use multiple personality disorder as a defense in a court of law, said The Hollywood Reporter.
DiCaprio, 40, has been interested in playing him stretching back to 1997.
Published in 1981, Keyes' book chronicles Milligan's story, including his court trial in the late 1970s in Ohio after being charged with robbery and raping three women on the Ohio State University campus.
In the preparation of his defense, Milligan, who died in December 2014, was diagnosed with multiple personality disorder.
Milligan's various personalities included Adalana, a lesbian taking responsibility for the rapes; Ragen, a Yugoslavian communist who admitted to the robbery; and Arthur, an uptight Englishman.
Hollywood has long wanted to bring Milligan's story to the big screen. High-profile directors who previously circled the project include James Cameron.