The duo will star in director Etan Cohen's "Holmes & Watson", which will give Arthur Conan Doyle's famous detective saga a comedic bent, reported Deadline.
Ferrell will play Holmes while Reilly will back him up as Watson.
Sony Pictures originally bought the project with Ferrell and Sacha Baron Cohen but things did not move to a conclusive end.
They have now revived the project and they are planning to go into production later this year.
Guy Ritchie, who gave Sherlock a quirky makeover, is coming up with a third movie, starring Robert Downey Jr and Jude Law.
Benedict Cumberbatch plays Sherlock in the hit series of the same name while CBS has a series called "Elementary" with Jonny Lee Miller and Lucy Liu.