The 34-year-old actor, who will soon be seen as David in Ridley Scott's Prometheus, will become a film juror at the Venice International Film Festival as part of his duties.
Fassbender, who will also co-executive produce the winner's next film alongside former colleague Scott, said: "I was delighted to join this partnership alongside Ridley, YouTube, Venice, and Emirates.
"I've worked with incredible storytellers before and am excited to help find the next great one through Your Film Festival."
Your Film Festival is a global competition that aims to discover the world's most talented storytellers. Directors, writers and producers from all over the world are invited to submit a 15-minute video of any format.
Scott's production company Scott Free will narrow down the entrants to 50 semi-finalists by the middle of the year.
The semi-finalists' films will then be posted on YouTube, where users can cast their votes.
The top 10 candidates picked by YouTube users will screen their movie submissions in Venice this September. The winner will be awarded a $500,000 (£320,000) grant to work with Scott Free and make a new film.
> Michael Fassbender 'happy he waited for fame'
> Ridley Scott planning 'Prometheus' follow-up?
Watch the trailer preview for Prometheus below: