Gian-Piero Ringel will produce the film through his and Wenders' Neue Road Movies banner. HanWay Films will handle international sales and introduce the film to buyers at the Cannes Film Festival.
Franco will play Tomas, a writer, who accidentally causes the death of a child. The story follows Tomas through the next twelve years, searching for the footprints of the accident on his life, as well as on the life of Kate, the child's mother.
Wenders, whose last film Pina was Oscar nominated and grossed more than $30m worldwide, had this to say in a statement.
"Every Thing Will Be Fine is a family drama, unravelling over the course of 12 years. A story of guilt and forgiveness, and of accepting things you cannot change anymore. We wrote it with 3D in mind, and I'm convinced that the medium lends itself really well to an intimate story."
Franco recently starred in Harmony Korine's Spring Breakers and Sam Raimi's Oz: The Great and Powerful. He is currently filming True Story opposite Jonah Hill for 20th Century Fox.
Every Thing Will Be Fine is in development and stars James Franco, Rachel McAdams, Charlotte Gainsbourg, Robert Naylor. The film is directed by Wim Wenders.