The actor is reprising his role as 007 for a third time in upcoming instalment `Skyfall` - due for release in 2012 - and the usually suave spy will sport an unshaven look for the first time.
Bosses are also reportedly scaling back production costs on the movie - which had been delayed because of studio MGM`s financial problems.
A source told The Sun newspaper: "They`ve really scaled back. The lavish production and locations have been cut. There is only a reduced cast and crew travelling to the few overseas destinations. There won`t be as much hand-to-hand fighting, it`s gone back to blowing stuff up - including London`s Vauxhall Bridge."
Daniel - who married actress Rachel Weisz earlier this year - has been busy for the last six months getting himself into prime physical condition for his return as Bond, undergoing a gruelling exercise regime.
A source told the Daily Star newspaper: "Daniel has been on an intense five-day-a-week regime, running around Central Park, doing sit-ups and then swimming and playing tennis every weekend. He`s in the best shape he`s ever been."
The James Bond character has been seen on screen once before with a beard.
In 2002`s `Die Another Day` Pierce Brosnan was seen with long facial hair after being taken captive by North Korean soldiers.
However, `Skyfall` will be the first movie where Bond chooses to have a beard.
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