The film is one of three high-profile projects on Media Asia's upcoming production slate. This year the company plans to invest $64m (HK$500m) in ten productions.
As announced last year, Media Asia is also co-financing Peter Ho-sun Chan's $40m The Warlords, with Morgan Chan Films and China Film, and Feng Xiaogang's The Assembly with Beijing-based Huayi Brothers. The Hong Kong company is sharing sales duties on both pictures.
The company, which produced Infernal Affairs and Confession Of Pain, is also backing Law Wing-cheong's Hooked On You, starring Miriam Yeung and Eason Chan, which is currently in production, and is developing an action film to be directed by Dante Lam.
Lu, who came to international attention with his Sony-backed environmental drama Kekexili: Mountain Patrol, will next tackle the infamous 'Rape of Nanking' incident in 1937 when Japanese troops invaded what was then the capital of China. According to Iris Chang's controversial book, The Rape Of Nanking, around 350,000 Chinese civilians were killed during the attack.
Developed by Stellar Megamedia, Nanking! Nanking! currently has a budget of around $13m (RMB100m) although this is likely to increase depending on cast. The project, which participated in the 2005 edition of the Hong Kong Asia Film Financing Forum, is currently being vetted by China's film censors and if approved will start shooting this month or next.
The project is one of several being developed to coincide with the 70th anniversary of the massacre this December. Also expected to start shooting this year is a $50m project jointly produced by US-based Viridian Entertainment and the Jiangsu provincial government.
Hong Kong director Stanley Tong is also developing a $30m project, entitled The Diary, based on the diaries of Japanese and German soldiers who witnessed the atrocities.