Based on the play Modigliani by Dennis McIntyre and adapted for screen by Jerzy and Mary Kromolowski, Modi will tell the story of the artist's time in Paris in 1916.
It will offer a snapshot of a "turbulent and eventful" 48 hours during which, having long considered himself a critical and commercial failure, he solidifies himself as a creative force with a string of successes which earn him the patronage of the elite of Parisian society
The project aims to start production in spring 2023 in Europe.
Depp said: "The saga of Mr Modigliani's life is one that I'm incredibly honoured, and truly humbled, to bring to the screen.
"It was a life of great hardship, but eventual triumph - a universally human story all viewers can identify with."
Modi will be his second feature directorial credit after 1997's The Brave, in which he starred alongside Marlon Brando.
It comes a week after Depp confirmed his first starring role since claiming victory in his now infamous legal battle with Heard in Fairfax County, Virginia, earlier this year.
He will appear in the film Jeanne Du Barry, produced by French company Why Not Productions.
Mr Depp sued his former partner over a 2018 article she wrote for The Washington Post about her experiences as a survivor of domestic abuse, which his lawyers said falsely accused him of being an abuser.
Pacino, whose numerous credits include The Godfather, Scarface and Donnie Brasco, has previously worked with veteran producer Navidi on various projects, including The Merchant Of Venice (2004), Wilde Salome (2011), and Salome (2013).
Modigliani, who worked mainly in France, is known for his portraits and nudes featuring elongated faces and bodies.
Although not well received during his lifetime, his works have since become highly sought after.
He died of tubercular meningitis in 1920 aged 35 in Paris.