Dutt is serving his sentence in Yerawada jail. But his wife Manyata is handling her husband's production house.
"Prabhu Deva has been signed to make a film for Sanjay Dutt company. Manyata met Prabhu and things got finalised last week," sources close to the development said.
Prabhu has previously directed mass entertainers like 'Wanted' and 'Rowdy Rathore'.
"We are yet to decide on the subject and actors for this film," the source added.
Another film, titled 'Hasmukh Pighal Gaya' and directed by Sejal Shah, is also being made under Sanjay Dutt's production house.