The supernatural thriller stars Sean Faris, Rachael Taylor, Luke Ford and Richard Dormer.
Anchor Bay Entertainment has US distribution rights and worldwide sales are being handled by The Little Film Company.
The film marks Generator's third feature after Paddy Breathnach's Freakdog (formerly titled Red Mist) and Cherrybomb starring Rupert Grint.
Generator founders Simon Bosanquet and Mark Huffam are producing.
Ghost Machine will shoot on location at Belfast's Crumlin Road Gaol with the aim of delivery in February 2009.
The story follows military technicians and game enthusiasts who misuse a virtual warfare training system in a disued prison, stirring up the spirit world. Sven Hughes and Malachi Smyth wrote the screenplay.
Generator financed the project with slate financing from Limelight, investment from Northern Ireland Screen and Framestore Features.
Hartwill previously directed commercials for Ridley Scott Associates.
'Sven Hughes and Malachi Smyth have produced a visceral, action-packed adaptation of Sven's original story and I'm really looking forward to bringing it to the screen here in Northern Ireland,' Hartwill said.
Bosanquet said: 'Ghost Machine is the perfect debut feature for showcasing Chris Hartwill's talents - we're thrilled to be working with him and with such an exciting cast of young stars.'