The film will be a new adaptation from the Henry Farrell source novel, about two ageing sisters trapped in a crumbling Hollywood mansion.
Hill will start work on the film shortly, according to Deadline, having recently finished Sylvester Stallone action movie Bullet to the Head.
The original featured iconic performances from Bette Davis and Joan Crawford, but the 70-year-old director claims that the new film will give two new actresses a chance to shine in the roles.
"The two equal leads demand great performers - that is a given," said Hill.
"The intensity of the Gothic storyline makes a reconfiguration of the drama still a potentially searing experience. The idea is to make a modern film without modernising the period. It needs to resonate the golden age of Hollywood."
Adell Aldrich, daughter of Robert Aldrich, the director of the 1962 film, is producing the film on behalf of The Aldrich Company.
Watch an excerpt from 1962's Whatever Happened to Baby Jane? below: