Sporting great Ali died at 74 last year following an illustrious career in the ring during which he became world heavyweight champion three times.
The Sun said producer David Sonenberg was looking to turn the life of Ali into a musical.
Sonenberg, who worked on Bat Out Of Hell, told the paper: “We can't wait to be doing it. We have no clue who will play Muhammad but it's going to be great.”
Ali was born Cassius Clay in 14 January 1962 and converted to Islam in the mid-1960s, prompting the name change.
As a child, Clay was first persuaded into his local boxing gym by a policeman, Joe Martin, who found the eight-year-old distraught and bent on revenge against a boy who had stolen his bicycle.
That policeman's decision would lead to the discovery of a fighter who transcended the sport.
He became a household name by winning gold at the 1960 Rome Olympics in the heavyweight division.
He soon turned professional and, fighting under his original name, he made his debut in October 1960 with a sixth-round decision over Tunney Hunsaker in Louisville.
In 1964, after climbing off the canvas to beat Henry Cooper in London, Clay stunned the seemingly invincible Sonny Liston with a seventh-round win at Miami Beach to win the world heavyweight title.
During his career, he fought race wars, was stripped of his world title for refusing to fight in the US war in Vietnam and lost his boxing licence for close to four years as a consequence.
The first loss of his professional career - to Joe Frazier - was in the “The Fight of the Century”, although he earned perhaps his finest win with victory over then-champion Foreman in 1974.
Further significant fights followed, such as the “Thrilla in Manila”, when he stopped Frazier after 14 memorable rounds.
He eventually retired in 1981 with a record of 56 wins from 61 fights, and with a worldwide following.
Parkinson's disease was diagnosed soon after, but he remained a public figure and famously lit the torch at the 1996 Olympic Games in Atlanta, the effects of his condition clear for the world to see.
In tributes following Ali's death, then US president Barack Obama said the boxer “shook up the world and the world is better for it”.
He wrote: “Muhammad Ali was The Greatest. Period. If you just asked him, he'd tell you. He'd tell you he was the double greatest; that he'd 'handcuffed lightning, thrown thunder into jail'.”
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