Chan (The Medallion, Fist Of Legend) will direct from a script by Chris Chow who wrote the Bill Kong-produced features Fearless and Blood: The Last Vampire.
Production on the English-language script is expected to start in Asia at the beginning of 2008.
Japanese video game company SNK Playmore has released more than 30 King Of Fighters games both in arcades and on home video game platforms worldwide in the franchise's 21-year history. The property has also spawned an animated TV series produced by Japan's Production IG, the company behind Mamoru Oshii's Ghost In The Shell.
Axis Entertainment's Joseph Chou and Convergence Entertainment's Tim Kwok will serve as main producers. Micott & Basara's Sumiji Miyake and Yasuhiko Kinoshita and Arclight Films' Gary Hamilton will executive produce.
Arclight Films' genre label Darclight meanwhile has added Renny Harlin's thriller Brodie's Law to its Cannes slate.
Kirsten Elms adapted the screenplay from Daley Osiyemi and David Bircham's graphic novel about an ex-con with special powers who tries to save his son from a shadowy organisation
Steve Squillante, Harrison Kordestani and Mark Costas will produce.
'This is a strong commercial film that exhibits material that a broad demographic can get excited about,' Darclight's Gary Hamilton said.
'Given the pedigree of Renny Harlin as well as this amazing and distinct story, we believe the film will do extremely well both domestically and internationally.'
Meanwhile Arclight Films has closed sales here to Richard Roxburgh's Australian drama Romulus, My Father starring Eric Bana and Franka Potente.
Rights to the family drama have gone to Germany (Square One), Australia and New Zealand (Dendy Films), Mexico (Gussi), Brazil (California Filmes), CIS and Russia (Ukrainian DVD), Canada (Alliance), Scandinavia (Scanbox).
Deals also closed in China (ERG), Bulgaria, the Czech Republic, Hungary and Romania (Forum), Greece (Private Cinema), Indonesia (PT Amero), India (Studio 18), the Middle East (Gulf), Thailand (Sahamongkol), Turkey (Aqua Pinema), Iceland (Sam), and Israel (United King).