The two boxers fought several historic bouts in the 1970s, and the film will be based around the confrontations between the two heavyweight fighters.
Lee hopes to shoot the movie in 3D and incorporate actual footage of the fights.
Morgan tells British newspaper the Daily Mail, "It's a look at how brutal the confrontations were between Ali and Frazier. They were marked by how aggressive Ali was towards Frazier out of the ring. He taunted and belittled him. Ang wants to work with 3D technology that will make an audience feel as if they're inside the ring."
Morgan hopes to finish the script next year (14). Muhammad Ali's story was previously brought to the big screen by Will Smith in 2001 biopic Ali.