Walter Hill is to direct the movie, which will be distributed domestically by Warner Bros. Pictures under its ongoing arrangement with Dark Castle.
Based on the graphic novel "Bullet to the Head," it tells the story of a New Orleans hitman and a New York City police officer who form an alliance to bring down the killers of their respective partners.
Joel Silver, chairman of Dark Castle Entertainment, previously produced the Stallone films "Demolition Man" and "Assassins."
"Sylvester Stallone is an iconic action star the world over and I'm thrilled to be working with him again," Silver said in a statement. "I look forward to joining with IM Global and After Dark in bringing this exciting new story to the screen."
Silver's previous creative collaborations with Hill include the movies "48 Hours" and "Warriors," as well as HBO's long-running "Tales from the Crypt" series.