In 1968, American helicopter pilot Hugh Thompson turned against his fellow soldiers to halt the infamous massacre of unarmed civilians in the village of My Lai, during which more than 300 South Vietnamese people were killed.
But Thompson was not hailed as a hero and was branded a traitor and threatened with a court-martial hearing instead.
An investigation led by General William "Ray" Peers later corroborated his claims.
Producers have not yet revealed which roles Mortensen and Landry Jones are slated to play.
The project marks a return to feature films for Gibney, who netted an Oscar for his 2007 documentary "Taxi to the Dark Side" and also received an Academy Award nod the previous year for "Enron: The Smartest Guys in the Room".
"This is a film I have wanted to make for seven years. Now that I have the right team in place, we can tell this powerful tale," he told Deadline of "Two Wolves".
"It's a true story about how everyday people can become heroes, not through supernatural powers, but through a commitment to do the right thing in the worst possible circumstances. Since Enron, I've been making films about people who abuse their power. This is film about two men who fought back."