Daily Variety said the movie -- with Alejandro González Iñárritu directing from a script by Guillermo Arriaga -- will also feature Gael García Bernal. Iñárritu and Arriagato previously collaborated on "21 Grams" and "Amores Perros." Variety said the studio was in final talks on the deal Wednesday, the day after Grey formally took over from former Paramount head Sherry Lansing.
"Babel" will tell four related stories set in Japan, Mexico, Morocco and Tunisia -- beginning with a tragedy that strikes a married couple on vacation.
Variety said the studio and Blanchett -- who won an Oscar last Sunday for "The Aviator" -- were still in talks and Pitt was also said to be in final talks to join production.