Who frontman Roger Daltrey said he has already turned down several scripts, but was hopeful this one could be completed for director Brad Silberling by the end of the year.
The surviving members of the legendary 1960s outfit are all working on the project, which will tell the tragic life story of rock's original wild man.
Moon, nicknamed "Moon the Loon" for his hellraising antics, died in 1978 from a drugs overdose. He was 31.
Who frontman Roger Daltrey said he has already turned down several scripts, but was hopeful this one could be completed for director Brad Silberling by the end of the year.
He told the New York Daily News: "It won't be a band story - it will be about the drummer on his day off.
"I've struggled for 10 years to make a film on the life of Keith and I've stopped two or three other people from making what would have been horrendous parodies."
Moon was just 16 when he was invited to join The Who in 1964. His quirky, offbeat drumming style and penchant for smashing his kit after gigs quickly earned him cult status in one of Britain's most notorious bands.
Always the showman, his madcap behaviour included trashing a series of hotel rooms, driving a Cadillac into a swimming pool and knocking his front teeth out on his 20th birthday, after slipping on a piece of cake he had earlier hurled at record executives.
It is also widely believed that he was the role model for the crazy Muppets drummer animal.
Alcoholism
After enjoying several years of success with the band, playing on hits like My Generation, Substitute and Pinball Wizard, the high life caught up with Moon and he was treated for alcoholism.
On 23 August 1978 he died following an overdose of medication prescribed for his condition.
A spokeswoman for The Who confirmed work on the movie was gathering momentum.
"They [Daltrey, Pete Townshend and John Entwhistle] are working with a young writer and a script is being prepared," she told BBC News Online.
She added that the band, who have just announced plans for a US tour later this year, were in talks to play a few dates in the UK, following the success of their comeback gig last Christmas at London's Shepherd's Bush Empire.