The 67-year-old Oscar-winning actor, who is a huge supporter of the US Democratic party, is a likely contender to portray the Republican leader in "Reykjavik", a biopic set in 1986 soon after the Chernobyl nuclear disaster, reported Sun online.
The film will focus on the peace talks between Reagan and the then-Soviet leader Mikhail Gorbachev held in the Icelandic capital at the time.
British director Mike Newell is in talks to helm the project and Ridley Scott and David W Zucker will produce it.
Douglas, who successfully beat throat cancer after being diagnosed with it in 2010, has just finished filming biopic "Behind the Candelabra", the Steven Soderbergh-directed film based on the life of famous American pianist and vocalist Liberace.
Next year, Douglas, who is married to actress Catherine Zeta-Jones, will be seen in "Haywire" and "Last Vegas", a comedy which also stars Robert De Niro, Morgan Freeman and Kevin Kline.
