Peace is the author of The Damned United, about football manager Brian Clough, which was turned into a film starring Michael Sheen.
The novelist described new book Red or Dead as a change from the tone of his previous work, saying: "I've written about corruption. I've written about crime. I've written about bad men and I've written about the demons. But now I've had enough of the bad men and the demons. Now I want to write about a good man. And a saint. A Red Saint. Bill Shankly was not just a great football manager. Bill Shankly was one of the greatest men who ever lived."
The novel, for publication in August, will follow the rise of Liverpool FC under Shankly, until his shock retirement in 1974. 2013 is the 100th anniversary of Shankly's birth.
Lee Brackstone, creative director of Faber Social, bought world rights for the book excluding Japan from Hamish Macaskill at The English Agency, with Rob Kraitt at Casarotto Ramsay handling film rights.
Brackstone said: "A novel about one of the great good men of British football comes as such a tonic and a wake-up-call in these days of extraordinary wealth, privilege and abuse of both in the Premier League. There quite simply could not be a better time, culturally and politically, for this novel.
"David Peace's ninth novel is an epic in scale and ambition. If The Damned Utd re-defined how fiction can make compelling drama and art out of sport, Red or Dead rips up the rulebook and does so all over again."
Peace is also the author of the Red Riding Quartet, which was turned into a series by Channel 4. He has also written GB84, and the first two volumes of a planned Tokyo trilogy, Tokyo Year Zero and Occupied City.
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