The film, titled Dreamland, will be shot in Australia.

It will tell the story of Dr Martin Couney, a German-born doctor who clashed with the European and American medical establishment in the early 20th century over the introduction of incubators.

Unable to get them into hospitals, Couney instead turned them into carnival exhibits, offering them to the parents of prematurely born infants for free and charging curious patrons 25c to see the tiny newborns.

Couney exhibited the incubators - and their tiny occupants - at a number of fairs, including the 1896 Berlin Exposition, the World's Fairs in Paris in 1900 and New York in 1901.

In 1903, Couney opened an exhibit at New York's iconic Coney Island, charging patrons but allowing premature infants to use them for free.

It is said as many as 8000 children's lives were saved as a result of Couney's work.

The exhibit became one of the most famous at New York's Coney Island.

Nash will co-produce the film with Australian producer James Vernon, whose most recent credit was the Mel Gibson film Hacksaw Ridge.

Vernon's other credits include Predestination, which starred Ethan Hawke, The Eye of the Storm, which starred Geoffrey Rush, and A Few Best Men, which starred Olivia Newton-John.

Nash has wanted to bring Couney's story to the screen for almost two decades, ever since his daughter gave him a birthday gift of Coney Island memorabilia, including an archival documentary which made passing reference to Couney.

"For about 30, 45 seconds in the documentary there was a soft tinkling of a piano and the voice talked about Dr Martin Couney and his incubators," Nash recalls.

"I watched it and I re-ran it and I re-ran it, those precious few seconds, and I'd never heard anything like this before," he told Fairfax Media.

Searching for more information, Nash came across a letter from a man who had been searching for other "Couney babies" - that is, children, like him, who had been born prematurely and whose life had been saved by the incubators at Coney Island.

"I'm reading this open letter and I'm getting this chill," Nash says. "It was like, these are survivors, these people are survivors. I knew then that I needed to find out more and I needed to tell the world about this man."

Earlier this year America's National Public Radio reported on the death of one of those "Couney babies", 96-year-old Lucile Horn who, weighing just over 900 grams at her birth, had been saved by Couney's incubators.

Horn said she had returned years later to the exhibit to meet Couney and thank him and was in turn introduced to the anxious father of a newly arrived premature infant.

"Dr Couney went over to him and he tapped him on the shoulder and said, look at this young lady, she's one of our babies and and that's how your baby's gonna grow up," Horn said.

Nash said the film would include the devastating fire that destroyed Coney Island in 1911.

That fire, which started on a boat ride named Hell's Gate, spread quickly through the park's other structures, which were made mostly of a highly flammable mixture of wood, plaster and hemp fibre.

In an extraordinary footnote, the incubator children were all saved from the flames by Coney Island employees, including the so-called "sideshow freaks", who were also exhibits in the park.

"You couldn't make this up and that's what makes it so amazing," says Nash. "The more I got into this story the more it was unbelievable and yet true."

Couney's exhibit was later a fixture at the adjacent Luna Park, also on Coney Island.

Nash said that while the film would be shot in Australia, the use of the present-day Luna Park, on Sydney Harbour, had been ruled out. "We looked into it ... but it has been rebuilt and looks very modern," Nash said.

The project is particularly meaningful for Nash, whose childhood was spent regularly visiting Coney Island with his grandfather; Nash was also deeply affected when one of his own grandchildren had to be placed in an incubator briefly shortly after birth.

"I knew at that moment for children like my granddaughter and others who were in much more serious condition, that most of them would leave that hospital with their parents because of Dr Martin Couney," he said.

Dreamland is expected to go into production later this year.