Tom Hanks' production company, Playtone, the paper reported, has inked a deal with Littlestar Services Limited, the company run by the hit show's producer, Judy Craymer, and ABBA songwriters Benny Andersson and Bjorn Ulvaeus. Discussions are now being held with Universal Pictures to finance and distribute the film.
A Universal spokeswoman declined comment on the deal, but confirmed the story's details.
The movie is expected to be released in late 2007, Variety said.
The musical — which includes 22 ABBA classics like "Dancing Queen," "Take a Chance on Me" and, of course, "Mamma Mia" — has earned $1.6 billion worldwide since its London opening in 1999.