According to Variety, Matt Holloway has written the script, based on the 1980s fantasy action about an immortal Scottish swordsman.
Holloway is best known for his work on Iron Man.
Reynolds recently starred as iconic super hero Green Lantern in the movie of the same name.
The 35-year-old is also due to begin filming Deadpool, based on the comic book character who he played briefly in X-Men Origins: Wolverine.
Reynolds has said that the film will have no connection to the widely panned Wolverine, and will most likely be rated R.
Summit Entertainment is producing Highlander, while Juan Carlos Fresnadillo (Intruders, 28 Weeks Later) is attached to direct.
There is no word yet on when filming will begin.
Watch Ryan Reynolds in the trailer for Green Lantern below: