Based on Mitch Cullin's novel of the same name, the screenplay will be penned by Jeffrey Hatcher.
Set in 1947, the flim follows the retired detective, who is haunted by an unsolved case from 50 years ago. Living in a small Sussex village with his housekeeper and son, who also solves crimes, Holmes can only remember fragments of the case.
The film is the second collaboration between director Bill Condon and McKellen, who also worked together on "Gods and Monsters."
The Tony winner and two-time Oscar nominee will star on Broadway in Waiting for Godot and No Man's Land, performing in repertory with Patrick Stewart. The productions will begin previews Oct. 26 at Broadway's Cort Theatre with an official opening Nov. 24.