The still-untitled film for Warner Bros. would feature Damon as a salesman whose life is called into question after he arrives in a small town, representatives for the actors told E! News. Krasinski is expected to co-star in the film.
The collaboration was first reported by Variety.
The Hollywood Reporter said Krasinski developed the idea with the help of author Dave Eggers and then pitched it to Damon.
Production is expected to begin early next year.