Horror movie veterans Brad Fuller and Andrew Form, responsible for films including The Texas Chainsaw Massacre and The Amityville Horror, told ShockTillYouDrop that a revamp is definitely happening.
"It's our next movie," said Form. "Hopefully shooting this spring."
Transformers' Michael Bay will also take on production duties.
Cape Fear writer Wesley Strick is reportedly attached to the new script, but the producers have assured fans that they won't be altering the storyline dramatically.
"It's not Freddy cracking jokes. We want to make a horrifying movie," said Fuller. "The concept is so scary, don't fall asleep or you'll die. This guy gets you when you're most vulnerable, in your sleep.
"We love that. That's the basis of the movie. It'll be most similar to the first one but in terms of kills and dreams we'll borrow from the entire series."
The producers have credited a good response to another horror movie remake as sealing the deal. Friday The Thirteenth has been revamped for a release next year, with Bay again at the helm, and the producers have claimed that early audience screenings have been very positive.
Original Nightmare star Robert Englund earlier ruled out a possible return to play Freddy Krueger but the producers have revealed that they are hopeful he might still appear in another role.