Sorrentino made the announcement while speaking to U.S Entertainment magazine Variety.
The 46-year-old Neapolitan director explained he was still working on the script for the Italian-language film, which will be shot next summer.
Sorrentino revealed the film's working title was 'Loro' - meaning 'they' or 'them' in Italian - but gave no hints as to which aspects of Berlusconi's life the film would focus on.
The former prime minister's life is a treasure trove of potential plots for a silver-screen epic.
From his stratospheric rise from cruise ship crooner to billionaire media mogul and prime minister, to accusations of mafia connections and reports of all night 'bunga-bunga' sex parties at his villa in Arcore, Berlusconi is one of the most controversial figures of recent political history.
In Sorrentino, Berlusconi's story is in the hands of one of the brightest stars in global cinema.
Since winning the Best Foreign Language Film Oscar for his 2013 film 'The Great Beauty', Sorrentino's stock has continued to rise.
His 2015 English-language film 'Youth', starring Michael Caine, scooped the Palme d'Or at last year's Cannes Film Festival and his new ten-part series, 'The Young Pope', starring Jude Law, recently premiered to great acclaim at the Venice Film Festival.
Sorrentino is no stranger to making films about Italian political figures.
His 2008 film, 'Il Divo', about former Prime Minister Giulio Andreotti's cosy relationship with the mafia was well received by critics – if not by Andreotti.
The politician allegedly walked out of a screening of the film, claiming it was “too much” and that he deserved to be “judged on his record”.
Whether Berlusconi reacts similarly to his big screen portrayal remains to be seen. But, ever the entertainer, Italy's ex-prime minister seemed initially enthusiastic about the project, reportedly telling sources he was“flattered” to be the subject of a new film.
However, Medusa films, a Berlusconi-owned company which has worked with Sorrentino in the past, hastily released a press release saying they would play no part in the production of 'Loro'.