Russell and former vice president Al Gore's daughter Kristin co-wrote the screenplay, which laces bawdy comedy with the film-maker's trademark political satire.
It is understood the project is set to go into pre-production within the next several weeks in time for a January or February 2008 pre-strike shoot.
Los Angeles-based IM Global is selling the Red Wagon Entertainment and Persistent Entertainment project here but did not return calls to discuss buyer reaction to the project.
Biel will star as Sammy Joyce, a naive small town girl who embarks on a healthcare reform crusade after her head is accidentally implanted with a nail that alternately turns her into a screaming harridan and a nymphomaniac.
Upon her arrival in Washington, the increasingly popular Sammy falls in with the wildly ambitious Congressman Aaron Driver played by Gyllenhaal.
Driver's self-motivated efforts to help the campaign lead to him being fired from office and earns Sammy's lifelong love and respect, thus solidifying the relationship and creating a bizarre new power couple.
The famously volatile Russell most recently directed the comedy I Heart Huckabees and his previous credits are Three Kings, Flirting With Disaster and Spanking The Monkey.
Biel starred in the summer comedy I Now Pronounce You Chuck And Larry while Gyllenhaal most recently appeared opposite Reese Witherspoon in the political thriller Rendition.