Baker will start shooting the Australian-financed thriller "Breath" later this year.
The movie is based on a book by Australian novelist Tim Winton and tells the story of two boys who push the boundaries of recklessness to escape the monotony of their lives in a small Western Australian town. They form a relationship with an adult surfer, played by Baker, and his wife.
The Los Angeles-based actor, who has already featured in more than a dozen films, said he was "beyond excited to be back in Australia realising this dream" to make "Breath".
Variety, which published the news at Cannes on the first day of the film festival, had reported in 2009 that Baker would star in the movie but was looking for a director for it.
Baker didn't explain why he decided to make his cinema directorial debut on the film. Previously, he has directed a few episodes of "The Mentalist".