Caradog James will direct the movie, which is described as a romantic sci-fi action thriller, according to The Hollywood Reporter.
The film is set in the UK at the height of a second Cold War. British scientists develop a robotic super-soldier which looks and sounds human but is a ruthless killing machine. As the project nears completion, a bug in the robot's programming kicks in, causing it to run amok.
Lotz will play the robot with Stephens as its obsessive creator, who continues to work on it in secret.
Stephens has previously starred in the James Bond movie Die Another Day, while Lotz appeared in The Pact and AMC's Mad Men.
The Machine's principal photography gets under way on July 23 in Cardiff, Wales.