The companies are in Cannes actively discussing the project, which is adapted from the Ernest Hemingway classic.
Jones will star as well as directing. Morgan Freeman and John Goodman are also being attached to star.
Jones will be in Cannes giving an exclusive presentation to buyers and investors for the $30m film. It is his second directorial feature after 2005's The Three Burials Of Melquiades Estrada.
Jones said: 'Adapting Hemingway's Islands in the Stream is a passion project of mine. I believe this passion will be communicated effectively and resonate with the audience who will be engaged in the personal experience of the main character. It is inspiring to know that Intandem and William Morris Independent understand and share my vision.'
Islands In The Stream is set to shoot in March 2009 in Puerto Rico. Jones and Eric Williams of Javelina will produce. Intandem is working with WMI to close the finance for the film, which will make use of the Puerto Rican tax credit.
Intandem chairman Gary Smith said: 'One of our core strengths at Intandem is in sourcing quality product. After reading Tommy Lee Jones's and Bill Witliff's emotive screenplay and hearing his vision for the project we were convinced that together we could develop it into a stunning, commercial film of the highest quality. We are committed to working alongside Tommy Lee and Javelina in developing this powerful and passionate film. It is thrilling to be working with such a talented director and the quality all-star cast that the he has attracted.'
WMI co-head Rena Ronson added: 'On the heels of The Three Burials of Melquiades Estrada, we are proud to be a part of Tommy Lee's next film, and look forward to working with Intandem and Javelina to help bring his incredible project to fruition.'