The 17-year-old actress - who is attempting to break away from her best known role as teen star Hannah Montana in the film series of the same name - will play a leading role in the dark film, based on the Lisa McMann book.
Paramount Pictures and MTV Films are picking up the rights to the film, which will be adapted by `Dirty Sexy Money` writer Christopher B. Landon, The Hollywood Reporter claims.
`Wake` tells the story of 17-year-old Janie, a girl who has the ability to be quickly sucked into people`s dreams, meaning she often sees things she doesn`t want to.
The book is the first of a three part series - with follow-ups `Fade` and `Gone` - which MTV and Paramount are keen to gain rights for.
Miley`s recent film `The Last Song` - on which she met current boyfriend Liam Hemsworth - has so far grossed $83 million at the worldwide box office, 75 per cent of which came from US cinemas.