Variety and the Hollywood Reporter say the film, which has been in the works for two years, has a script by "Reindeer Games" and "The Ring" screenwriter Ehren Kruger.
The imaginary plot has the folklore collectors, Jacob and Wilhelm Grimm -- now called Jake and Will, and to be played by Ledger, 23, and Damon, 32, respectively --- traveling from village to village and performing exorcisms before astonished townsfolk.
That is, until they confront a true fairy tale curse.
Williams, 50, would play the villainous Cavaldi, while British and Broadway stage star Jonathan Pryce ("Miss Saigon"), 55, would play Delatombe, another villain.
Should all the pieces fall into place, the movie would be released next year.
Just by way of a trivia note, in 1962 MGM produced a widescreen Cinerama epic, "The Wonderful World of the Brothers Grimm," starring Laurence Harvey as Wilhelm and Karlheinz Boehm as Jacob. It was a famous bore.
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