An Australian official says the movie will be directed by Australian Alex Proyas, who also directed "I, Robot" starring Will Smith and "Knowing" with Nicholas Cage.
New South Wales state Acting Premier Andrew Stoner says the movie will be shot predominantly at Fox Studios in Sydney. It is targeted for release in 2013.
"Paradise Lost" is an epic poem by 17th century English poet John Milton. It tells the story of Satan tempting Adam and Eve, and their expulsion from the Garden of Eden.
Stoner said Wednesday that had the movie not been lured to Sydney with financial incentives, "it would have been opportunity lost, not Paradise Lost."