The former California governor will be filming the movie in Belen, N.M. in October, reports the Valencia County News-Bulletin.
The movie follows convicts trying to make their way to the Mexican border through New Mexico after escaping from a Las Vegas prison.
The rest of the casting for the modern-day Western will be complete in September, according to location manager Paul Roberts.
"Last Stand" marks the first major movie role Schwarzenegger since 2003's "Terminator 3: Rise of the Machines." He also had a cameo in last summer's "The Expendables."
Schwarzenegger said in May that he was putting his acting projects on hold after disclosing that he fathered a child with a family housekeeper and splitting with wife Maria Shriver.
The Associated Press contributed to this report.