The Prince of Persia actor will feature alongside Hugh Jackman in the film, which tells the story of a small-town carpenter named Keller who takes the law into his own hands when his daughter is kidnapped.
Jackman's Keller ends up on a collision course with Gyllenhaal's detective Loki when he embarks on his rescue mission, according to Deadline.
Gyllenhaal is currently starring in End of Watch. He learned about Prisoners while working with Villeneuve on indie thriller An Enemy.
Production company Alcon Entertanment's co-founders and co-CEOs Broderick Johnson and Andrew Kosove recently confirmed Gyllenhaal's involvement in the project following rumour and speculation.
Prisoners is scheduled to enter production in early 2013 for an autumn release.
Watch the trailer for End of Watch below: