Birth of the Dragon is to centre upon a 1964 showdown between Lee, who was resident in San Francisco at the time, and kung fu tutor Wong Jack Man, according to Variety.
Accounts of the face-off vary in terms of the reasons behind its instigation, its length and even its eventual outcome, but it was a turning point for Lee, who then decided to create a new fighting style, having previously trained under Wing Chun master Yip Man.
Lee had demonstrated little hesitation in tangling with Triad members during his teenage years in Hong Kong, and Birth of the Dragon, told from the perspective of Lee's student Steve Macklin, will see the influential martial artist tackle organised crime in San Francisco's Chinatown.
The film's screenwriters have already collaborated on Nixon and Ali, while Nolfi has worked on The Bourne Ultimatum and Ocean's Twelve.
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