Hoffman, the star of Capote, will embark on his first-ever international theatre collaboration by directing the world premiere of Riflemind, starring Hugo Weaving and written by Andrew Upton, Blanchett’s husband.
"I’ve known Andrew for eight years and have always felt that he was an extraordinarily bright and talented man," Hoffman said in a statement.
"His play is an original and I hope this opportunity to collaborate with Andrew and the Sydney Theatre Company will be the beginning of many more to come."
Blanchett will follow her 2006 STC debut by directing David Harrower’s award-winning play Blackbird, about the awkward reunion of a man and a woman 15 years after a brief sexual affair when he was 40 and she was just 12 years of age.
STC artistic director Robin Nevin said Hoffman and Blanchett’s involvement was a big coup.
"The company is more and more internationally positioned as the years go by," she said.
"These are serious theatre people and they can be easily lured back onto the stage because that is where they have those special experiences."
A total of 11 productions will make up the STC’s 2007 season, beginning with Michael Cove’s Troupers, in February.
That production will star Barry Otto, Blazey Best and Josh Quong Tart.
The line-up also includes productions of The Season of Sarsaparilla, Ying Tong: A Walk With The Goons, The Art of War, A Midsummer Night’s Dream and Tales from Vienna Woods.
The season will also include Don’s Party, David Williamson’s classic Australian play, and following a Melbourne run, The 25th Annual Putnam County Spelling Bee will have its Sydney premiere.
As well as overseeing all the STC productions, Robyn Nevin will star alongside Max Cullen in Love-Lies-Bleeding, a play by American author Don DeLillo, which will be directed by Lee Lewis.
"I have wanted to work with Max Cullen for years," said Nevin.
"He is just a wonderful man."
Meanwhile, Nevin said the high profile of some of the season’s performers and directors may make it easier to tour the productions overseas.
"That is always an ambition that we have to work overseas," she said.
"Of course that is a hope for the future and inevitably there will be international interest in these very high-profile and wonderful people."