The 'Basic Instinct' star plays flamboyant gay pianist Liberace in a new biopic of the same name and rather than being nervous about having Matt as his younger partner in the film. he is excited about it.
Douglas said: "I'm just going to get really comfortable so it's not a caricature. Matt Damon's going to be my younger lover. God bless Matt."
The film - directed by Stephen Soderbergh - will be a departure for both actors, as they are both known for their macho movies.
Douglas has appeared as an alpha male character in most of his roles, including stockbroker Gordon Gekko in 'Wall Street', while Damon plays the all-action lead in the 'Bourneâ¦' spy thriller series.
Douglas believes the move will pay off for both actors.
He added in an interview with The Sun newspaper: "He's right to take chances. It's smart trying to mix it up a bit and maintain the franchise and get to do a picture that turns you on."
Douglas' work rate has slowed down in recent years - he has taken on only a handful of roles in the last decade - which has given him more time to focus on his private life with wife Catherine Zeta-Jones and the couple's two young children, Dylan, nine and Carys, six.
He added: "I'm no longer obsessed about work and I've been enjoying time with my family. I love not having to worry about my career.
"I'm returning to work now, but since I married Catherine it's been tough to get me out of the house."
'Liberace' is scheduled for release sometime in 2012.