The scheme is also backed by Liverpool Culture Company, the UK Film Council and the BBC.
Each film will get a cash budget of £250,000.
There have been 155 submissions and a short list of 25 films will be selected. The three final films will be developed, shot and post-produced in Liverpool and will premiere in autumn 2008 during the city's Capital of Culture celebrations.
The films will be then shown on the UKFC-backed Digital Screen Network and the BBC has UK broadcast TV rights.
Russo worked in US public TV and moved to London in the mid-1990s to work on projects including Brothers Of The Head and BBC project Shiny Shiny Bright New Hole In My Heart. She also worked at Blast! Films.
'I was attracted to Digital Departures because it was a chance to get back to my roots,' said Russo, who will executive produce the three films. 'Do-it-yourself filmmaking is relatively new to the UK and people are generally becoming very supportive of other people's efforts.'