The film is based on the 2009 Thomas Pynchon detective tome, reported Variety.
It is set in 1960s LA and follows the drug-fuelled detective Larry "Doc" Sportello as he investigates the case of a kidnapped girl.
Anderson will write and direct the film.
Phoenix and Witherspoon's last film together made more than USD 100 million at the domestic box office and Phoenix was nominated for an Oscar.
While Witherspoon, 37, earned the golden statuette for her performance in the film.