The Bourne star had been rumoured to take charge of thriller Father Daughter Time: A Tale Of Armed Robbery And Eskimo Kisses, but is now thought to be setting his eye on an untitled project about a town being poisoned, said The Hollywood Reporter.
John Krasinski - who pitched the idea and co-wrote the script - is said to be in talks to star alongside Matt.
Damon will apparently play a salesman, who arrives in a small town only to have his whole life changed. Details about Krasinski's role have not been revealed.
Ben Affleck and The Adjustment Bureau's Chris Moore are helping to produce the film, which is expected to start production in spring 2012, with Matt and John.
Damon is currently filming Elysium with director Neill Blomkamp, which will be followed by the biopic about flamboyant pianist Liberace, marking his sixth collaboration with Steven Soderbergh