This will mark the second time Spacey will be a villain for Warner Bros. He previously played Lex Luthor in the film Superman Returns.
In Joe Claus, Vince Vaughn will play the loser brother of Santa who decides to go and live at the North Pole.
John Michael Higgins, who worked with Vaughn in The Breakup, has also joined the cast as an elf. Judi Dench will also star in the project, which was written by Dan Fogelman.