According to Variety, Soderbergh is in the early stages of developing the film about the flamboyant showman, teaming with writer Richard LaGravanese and producer Jerry Weintraub.
The trade says that Douglas would play Liberace, the Vegas icon who continued to deny that he was gay even after Scott Thorson sued him for $113 million in palimony in 1982.
Damon is reportedly in negotiations to play Thorson, who claimed to have had a five-year relationship with Liberace, but eventually settled for $95,000 in 1986, one year before Liberace's death.
The trade emphasizes that the Liberace film isn't expected to be on Soderbergh's immediate slate. The direct will next helm "The Girlfriend Experience" for 2929 Entertainment.
Douglas previously worked with Soderbergh on "Traffic."
Damon is a more frequent Soderbergh collaborator, having appeared in the three "Ocean's" movies and in the director's upcoming "The Informant."