"Behind the Candelabra" will be directed by Steven Soderbergh. It will also star Matt Damon as Scott Thorson, the younger live-in lover of the flamboyant entertainer, to be played by Douglas. HBO made the announcement Tuesday.
The film's title refers to the trademark candelabra always gracing Liberace's grand piano when he performed. He was also known for his outrageous costumes and extravagant jewelry.
The 67-year-old Douglas has recently battled throat cancer, but last January he announced his tumor was gone and predicted he had beaten the disease.
"Behind the Candelabra" is scheduled to begin production next summer. No airdate was announced.