Ray's script for The Ballad of Richard Jewell will be adapted from a Vanity Fair article by Marie Brenner about the security guard falsely vilified as the 1996 Atlanta Olympics bomber, according to The Hollywood Reporter.
In real-life, Jewell discovered the bomb-laden backpack, reported it and helped clear sports fans from the area before it exploded.
But just three days later, he was a terrorism suspect and the subject of an unrelenting media storm that wrongly assumed his guilt. As Jewell himself said, the papers were on him "like piranha on a bleeding cow" and he became a scapegoat.
DiCaprio and Hill will co-produce the Fox movie with Kevin Misher, Jennifer Davisson Killoran and Andy Berman.
Both actors starred in Martin Scorsese's The Wolf of Wall Street, which lost out to 12 Years a Slave in this year's Best Picture category.