Nixon's Stephen Rivele and Christopher Wilkinson will write the project for QED International and Groundswell Productions.
The movie will merge the biopic and action genres and take place in the aftermath of Lee's famous showdown with Wong Jack Man in 1965.
Birth of the Dragon will see the duo join forces to take down Chinatown gangsters in San Francisco, according to The Hollywood Reporter.
Lee's life was previously chronicled in the 1993 biopic Dragon: The Bruce Lee Story, directed by Rob Cohen and starring Jason Scott Lee as the martial arts legend.
A release date for Birth of the Dragon is yet to be announced.
Watch a trailer for Dragon: The Bruce Lee Story below: