Warner Bros. has been trying to get the adaption off the ground for five years, in 2012 the studio hired 'True Detective' director Cary Fukunaga to direct two pictures.
The report states that as New Line prepares for a June move from West Hollywood to Warners' Burbank Lot, the studios are deciding what type of projects to pursue.
New Line is set to take point on horror films. The studio is no stranger to horror, releasing last year's box office smash 'The Conjuring.'
'It' tells the story of a group of children called the Losers Club, which defeats a clown looking creature called it. The Losers Club are then forced to team up again years later, now adults, to defeat the creature after it resurfaces.
The film is to be split into two parts, the first focusing on the club as children, the second focusing on the club as adults.
However, this is not the first time Stephen King's horror play has been adapted.
In 1990, ABC aired a miniseries that told the story of the Losers Club and the evil creature that terrorizes them.
There is no release date set for 'It.'