The Wired actor will play the lead role in the series, which focuses on the tale of Captain Flint twenty years before the events of Robert Louis Stevenson's Treasure Island.
Michael Bay is producing the series - which has been picked up for an eight-episode first season run on the Starz cable network - through his company Platinum Dunes.
Stephens is best known for his work in the James Bond film Die Another Day and more recently in shows like Robin Hood and Vexed.
Production on Black Sails is scheduled to begin later this year in Cape Town, South Africa.
The show is expected to premiere in 2014.