British artist McQueen will be directing from a script co-written with John Ridley, according to Variety.
12 Years A Slave centres on the true story of a New Yorker named Solomon Northrup who is kidnapped from Washington in 1841 and sold into forced labour. He is rescued from a cotton plantation in 1853 after years of slavery.
Dirty Pretty Things star Chiwetel Ejiofor will be taking on the lead role, with Fassbender's part not yet announced.
McQueen and Fassbender are currently doing the film festival circuit with Shame, which co-stars Carey Mulligan.
Shame was recently picked up for US distribution by Fox Searchlight, despite its risque subject matter.
Fassbender is also rumoured to be up for the lead role in the remake of RoboCop.
Watch Michael Fassbender in Steve McQueen's Hunger below: