Lau is best known for the Infernal Affairs franchise, which drew Hollywood's Martin Scorsese to make The Departed, an Oscar winner.
The question of who will direct the new film assumed significance as the previous two movies were directed by Huang Jianxin and Han Sanping, both born in the 1950s on the Chinese mainland.
Also, such patriotic movies had been mostly directed by filmmakers from State-owned studios with veteran actors in key roles.
But the "rules" were broken for The Founding of an Army.
The cast is another reason that caused controversy.
In the film, most of the actors playing Chinese military leaders from the 1920s are young pop idols.
Meanwhile, Huang, who is the executive producer, says that they had two plans for casting choices.
"One plan was to use actors aged between 35 and 40, while the second plan was Lau's, who wanted a younger cast to relive history."
Zhou Enlai was 29 and Ye Ting was 30 when they launched the Nanchang Uprising in 1927.