According to Entertainment Weekly, Downey will voice Mr. Peabody in the project.
The characters were part of the Rocky and His Friends and The Bullwinkle Show animated TV series of the 1950s and 1960s.
Downey's character is an intelligent dog that travels through time with Sherman, his "pet boy".
"Mr. Peabody is this genetic anomaly. He does have brothers and sisters, all of them non-speaking, no super-smart dogs. He's an outcast, but has overcome it by being so great at so many things," director Rob Minkoff said about the character.
The 3D DreamWorks project is expected to arrive in cinemas in 2014.