Dylan won an Oscar last year
The veteran has been approached to star in an as-yet-untitled film about a musician who is brought out of prison by his former manager for one last concert, according to the Daily Variety newspaper.
Some of Dylan's music may feature in the film but it was unclear whether he will write any new material for the movie.
It will be directed by Larry Charles, who was an executive producer of the long-running US sitcom Mad About You.
Producers are aiming to complete the picture in time for a premiere at the 2003 Sundance Film Festival.
Resurgence
Dylan's last major acting role was in the 1987 movie Hearts of Fire.
He also starred in and directed the 1978 movie Renaldo and Clara, which he co-wrote with Sam Shepard, and he took a co-starring role in the 1973 western Pat Garrett and Billy the Kid.
The singer has enjoyed a new lease of life of late.
Last year he won his first Oscar for the song Things Have Changed from the Michael Douglas movie Wonder Boys.
His latest album, Love and Theft, has been a critical and commercial hit, and it is up for three Grammy nominations, including the prestigious album of the year award.
It is his 43rd album since he burst onto the music scene in the early 1960s.
Last year he bemoaned the state of modern music, saying he gets into regular fights with his teenage daughter.
"The radio makes hideous sounds," the 60-year-old told Time magazine.
The composer of such classic songs as Knockin' On Heaven's Door, Times They Are A Changin' and Blowing in the Wind said that there is no natural successor to his work.
In another interview with USA Today he said: "People who came after me, I don't feel were ever my peers or contemporaries, because they didn't really have any standing in traditional music."