The 52-year-old director is on board to pen the sequel of the 2016 movie, according to The Hollywood Reporter.
The original film was helmed by David Ayer, who had confirmed that he would not return as director.
O'Connor was already on a shortlist that included filmmakers such as Jaume Collet-Serra and Mel Gibson - whom the studio approached, before they decided to go ahead with other ventures.
Actors Will Smith, Margot Robbie and Jared Leto will reprise their roles.
The film will begin production next year.
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