The $65m film is set in 1920s Vienna and adapts the classic story that inspired Tchaikovsky's ballet.
Konchalovsky and Chris Solimine wrote the screenplay, and the film features lyrics by Oscar winner Tim Rice.
The cast features John Turturro, Nathan Lane, Richard E Grant, Frances de la Tour and Elle Fanning.
Paul Lowin is producing, as Nutracker continues its 13-week shoot in Hungary. The film is slated for release at the end of 2008.
Odyssey's Ralph Kamp said: 'We'll be introducing our distributors to the project at Toronto and at the AFM this year, with a view to them working through to their releases from Thanksgiving 2008.'
Odyssey's Louise Goodsill added: 'Andrei is putting together a masterpiece on so many levels; creatively it's audacious and commercially it's the perfect holiday season movie.'