According to The Hollywood Reporter, the new film is not a remake or reboot of the original 1986 film which starred David Bowie and Jennifer Connelly and will act as more of a sequel.
Alvarez is set to direct the feature from a script he is writing with Jay Basu.
The duo is tackling "Labyrinth" after they finish work on "Girl in the Spider's Web," the sequel to "Girl With the Dragon Tattoo" which Alvarez is also set to direct.
Lisa Henson of The Jim Henson Company is producing.
The original directed by Muppets creator Jim Henson before his death at 53 in 1990, featured Connelly in one of her first roles navigating a magical maze in order to save her young brother from the goblin king played by Bowie.
Bowie's character will not be present in the new film.
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