Pushing Daisies actor Pace is in talks to play the villain in the Disney and Marvel Studios movie, The Wrap reports.
If Pace signs on, the actor would join leading stars Chris Pratt (Zero Dark Thirty) and Zoe Saldana (Avatar).
He was previously reported to be in the running for the lead role of Star-Lord, which eventually went to Pratt.
Former WWE star Dave Bautista, Michael Rooker (The Bone Collector) and Ophelia Lovibond (Nowhere Boy) will also star in the film.
Production on Guardians of the Galaxy is slated to start in June.
The film has been given a US release date of August 1, 2014, with a UK release set for the same month.
Pace was most recently seen in the first instalment of The Hobbit trilogy, An Unexpected Journey.