The Wrath of the Titans star will take the lead in the drama, reports Variety.
The film is set in the very near future, focusing on Ramirez as an Iraqi War veteran struggling with post-traumatic stress syndrome in Corpus Christi, Texas.
The Donnie Darko director's project was first announced over a year ago.
Kelly is also known for his films Southland Tales and The Box.
Ramirez has been connected to Kathryn Bigelow's Osama Bin Laden movie and was formerly in the running to play the villain in Star Trek 2 before losing out to Benedict Cumberbatch.
He was also rumoured to play General Zod in Superman: Man of Steel, a role which was eventually given to Michael Shannon.
Robert Rodriguez is attached to produce Corpus Christi.
Watch Edgar Ramirez talking to Digital Spy about Carlos below: