Nygaard, whose plan to get ransom from his father-in-law by getting his wife kidnapped goes awry, was portrayed by William H Macy in the 1996 feature film.
FX's 10-episode limited series is inspired by the Coen brothers' 1996 best picture nominee and will follow an all-new "true crime" story with a new case and characters, according to the Hollywood Reporter.
Lester is an insurance salesman who is henpecked by his wife. His life is changed forever when a mysterious stranger comes to town. The part earned Macy a best supporting actor Oscar nomination.
Noah Hawley will write the script as well as executive produce. Joel and Ethan Coen, the writers, directors and producers behind the film are on board to executive produce alongside former network chief-turned-producer Warren Littlefield and Geyer Kosinski.
The series is being directed by Emmy winner Adam Bernstein.