The actor has kept a low profile since sexual assault allegations, which he denied, emerged in 2017.
The allegations caused Spacey to lose several jobs, including his starring role in Netflix's House of Cards.
He is set to appear briefly in Nero's upcoming low-budget indie film, L'uomo Che Disegnò Dio, according to Variety.
Producer Louis Nero confirmed to the US trade publication that Spacey would appear in a small role as a police detective in the film, which is about the rise and fall of a blind artist who can make accurate portraits of people by listening to their voices.
Franco Nero, who will also star in his own feature, told ABC News: "I'm very happy Kevin agreed to participate in my film. I consider him a great actor and I can't wait to start the movie."
Spacey has won several Academy Awards, including best actor for American Beauty in 2000 and best supporting actor for The Usual Suspects in 1996.
After allegations about his behaviour emerged in 2017 during the Me Too movement, Spacey was fired from House of Cards and edited out of the Oscar-nominated film All The Money in the World.
All the scenes Spacey had filmed were re-shot with actor Christopher Plummer, who took over Spacey's role as billionaire John Paul Getty.
In August 2019, Spacey gave his first public performance for almost two years in Rome, where he read a poem about a boxer lamenting the loss of his once-glorious career.
The appearance at the Palazzo Massimo alle Terme came less than three weeks after prosecutors in the US dropped a criminal case against Spacey, relating to charges of indecent of assault and battery.
London's Metropolitan Police has been investigating six allegations of sexual assault in the UK between 1996 and 2013.
The Hollywood Reporter said last month that that investigation had concluded, adding that the findings had been handed to the Crown Prosecution Service.
The CPS told the BBC on Monday: "We are examining a file of evidence referred to us by the Metropolitan Police."
Spacey was artistic director at The Old Vic theatre between 2004 and 2015. At least 20 young men involved at the London Theatre reported allegations of sexual misconduct against the 61-year-old in 2017.
His former colleague there, actress Vanessa Redgrave, is also set to appear in the new Italian film - if she can travel from England to Italy, its producer added.