Gilliam first tried to shoot the movie nearly a decade ago but the production was sidelined by weather and budget woes, as well as an ailing leading man in Jean Rochefort. The setbacks were chronicled in a popular documentary called "Lost in La Mancha."
"'Quixote' is what we're working on at the moment. Hopefully, that'll get up and running next year," Gilliam told Paste magazine.
Asked if Depp is to rejoin the project as a 21st century marketing executive transported back 500 years and mistaken by Quixote as his sidekick Sancho, Gilliam replied: "Yeah, and I re-wrote the script. Robert Duvall has agreed to play Quixote. I'm really excited. So it's all that business of funding now."
Gilliam and Depp previously collaborated on "Fear and Loathing in Las Vegas."