Bradley Cooper to star as Lucifer.

Director Alex Proyas is to help break the drought of big-budget live-action features in Australia by making his next film, the action fantasy Paradise Lost, in Sydney.

It is understood that the current schedule has cameras rolling in October.

Proyas is one of the producers and his key partners are Legendary Pictures and US producer Vincent Newman. Warner Bros Pictures is distributing worldwide.

Bradley Cooper, best known for The Hangover, has been cast as Lucifer. The film is a reworking of an epic poem about god, Adam and Eve, and the fall of man, written in the 1600s by English poet John Milton.

The news was announced at a press conference at Fox Studios Australia by acting New South Wales premier Andrew Stoner and its value to the state is clear: an estimated A$88m will be spent on production and 1,300 people will be employed, 200 in visual effects.

The government also gets a significant new taxpayer as part of the deal: US-based Digital Domain has given a commitment that it will establish a permanent base in Australia’s biggest city after it finishes work on Paradise Lost.

It is envisaged that there will be 72 weeks of post and visual effects work, after eight weeks of principal photography and motion capture, and a 20-week post-production period.

Australia recently doubled the size of the rebate available under its PDV (post, digital and visual effects) Offset: it was 15% but, once the legislation is passed, work done after July 1 will be able to claim 30%.

Stoner personally went to the US to argue for the film. He hasn’t revealed the level of cash incentive he offered but it would have come out of the $20m attraction fund within his Department of Trade and Investment.

Given that Proyas is the key driver of Paradise Lost, once completed it is likely to pass the significant Australian content test that will make it eligible to apply for a 40% rebate on qualifying Australian production expenditure through the Australian Tax Office. This was the case with his previous film, Knowing.

The strength of the dollar is the key reason that big-budget runaway productions have fallen away, and a recent modest increase in the Location Offset - from 15% to 16.5% — is not expected to have much effect.

More big-budget Australian films are being made, however, because of the 40% Producer Offset. Baz Luhrmann’s The Great Gatsby, starring Leonardo Di Caprio and scheduled to start shooting in September, falls into this category.