There have been rumors over what will become of the 007 movies since longtime Bond film producers Barbara Broccoli and Michael G Wilson resigned their positions in February.Villenueve will also act as an executive producer of the new movie, who received worldwide praise as a director of Dune franchise, along with Blade Runner 2049 and Arrival.
In announcement, Amazon did not provide indications as to who would be the next person to play James Bond after Daniel Craig relinquished playing the latest version.
As he put it, Villeneuve said that he felt the burden of the new movie was enormous, but he was excited in the challenge.
I have been brought up on a diet of escapist movies, and the earlier James Bond movies with my father since Dr No and Sean Connery. I am a Bond fanatic. --He is holy ground to me, he said.
I will be doing the tradition proud and paving way to numerous new missions in the future.
He then further noted that he and other producers Amy Pascal and David Heyman - who have been running Spider-Man and Harry Potter respectively - were excited to get Bond back on the big screen.
Mike Hopkins, the head of the Amazon MGM Studios, declared Villeneuve to be a "cinematic master" whose film would offer viewers worldwide immersive narrative.
The release date of the next Bond film is yet to be defined because the new Bond actor is still being searched.
The two British actors Aaron Taylor-Johnson and James Norton have been considered the leading candidates to play the role and the name of the Irish actor Paul Mescal has been thrown into the hat as well.
Villeneuve rose to fame as his works such as Sicario, Prisoners and Incendies recorded critical successes.
Later in 2016, his film Arrival is a science fiction thriller that received his first Oscar nomination as a director.
The most recent blockbusters, Dune and Dune: Part Two collected a total of over $1bn (£730m) at the global box office, and both movies were nominated for the best picture Oscar in the years of their releases.
Later this year Villeneuve will begin filming Dune Messiah, the third film in the Dune franchise, which may see a release in 2026.