Dadi and China Film will also co-finance, with Chui Po-chu (Crouching Tiger, Hidden Dragon, Kung Fu Hustle) as producer and Khan Chan (Red Cliff) as scriptwriter.
The film will be set against a period of war in China when small kingdoms suffered from long-lasting battles and the story will focus on Confucius' transformation from an ordinary book-keeper to a philosopher and a sage.
It will also portray his long journey around small kingdoms in northern China preaching his beliefs, and his 72 disciples.
The actor to portray Confucius is yet to be announced but is likely to be chosen among top mainland actors such as Chen Daoming, Zhang Fengyi and Pu Cunxi. Shooting will start in November and the film is scheduled to be released in October, 2009, which will coincide with the 60th anniversary of the People's Republic of China.
Apart from Confucius, Dadi is also producing Antony Szeto-directed and Sammo Hung-starring contemporary martial arts drama Wushu. The film is now in post-production.
Dadi's distribution department plans to distribute Johnnie To's Sparrow in mid-August and Shochiku's 10 Promises To My Dog in the autumn.
Dadi Century is part of the Dadi Media Group, which owns a digital cinema chain and digital TV service company. As of summer 2008, the group owned 20 cinemas and 57 digital screens in China.
Most of the cinemas are based in Guangdong province. It plans to open another cinema in Beijing after the Olympics.