The 2021 Golden Globe nominee will direct an 'original, futuristic sci-fi western' centred around the classic movie monster for Universal, as part of the film company's second attempt at reviving its monster franchise.
As well as directing, Zhao will write and produce the film.
"I've always been fascinated by vampires and the concept of the Other they embody," Zhao said (via The Hollywood Reporter).
"I'm very excited to work with Donna, Peter and the team at Universal to reimagine such a beloved character."
The announcement follows the failed Dark Universe taking off in a brand new direction last year, beginning with Elisabeth Moss' thriller-horror The Invisible Man.
Abandoning previously-announced projects such as the Angelina Jolie-starring Bride of Frankenstein from director Bill Condon – following Tom Cruise's box-office failing The Mummy revival – the universe will also welcome a monster movie called Dark Army from Bridesmaids director Paul Feig.
Feig has previously described that film as a "true monster movie" that is "about outsiders".
Zhao recently directed the critically lauded Nomadland.
Eternals is currently in post-production.
Eternals is currently due to be released in cinemas on November 5, 2021.
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