The flick is part of Bay's new two-picture deal with the studio.
Bay also is to commence this spring the filming of "Pain and Gain," which is based on a true story and follows a group of bodybuilders who engaged in a campaign of kidnapping, extortion and murder in Florida.
"Michael has been working on 'Pain and Gain' for a number of years but has patiently waited for the perfect casting to trigger a start," Adam Goodman, president of Paramount's Film Group, said in a statement Monday.
"Clearly his patience has paid off as we couldn't be more excited about this combo. His passion for this project is just awesome."
The next "Transformers" is set for release June 29, 2014, but no casting has been announced for it.