Sylvester Stallone has chosen what he hopes to be his next project with “The Negotiator,” which may end up as a co-production between David Hoberman’s Mandeville Films and Arnon Milchan’s New Regency Prods., sources said.

The piece, set in Chicago, is about a hostage negotiator who is set up for murder and tries to clear his name. He takes a group hostage in order to smoke out the guilty party; he huddles under sniper fire with a cool negotiator brought in on his request. Together they solve the case and clear his name.

The project would fulfill a commitment Stallone has with Warner Bros. Insiders said that Stallone’s WMA agent Arnold Rifkin and Stallone found the script and have been trying to set up the project for some time.

Stallone, who stars in the current “Daylight,” next stars in Miramax Films’ “Copland” and Cinergi’s “An Alan Smithee Film.”

Mandeville has a number of projects on its slate, including “George of the Jungle” and “The Sixth Man.” On New Regency’s slate are “L.A. Confidential” and “The Crowded Room.”

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