Sir Peter Jackson has finally been given the go-ahead to make a two-film production of The Hobbit - but it's still not clear whether the movies will be shot in New Zealand.
The green light was given in Hollywood on Friday (Los Angeles time) by New Line Cinema, Warner Brothers and MGM, who say Sir Peter will work with his long-time creative partners, his wife Fran Walsh and Philippa Boyens.
Production starts in February. The films will be shot in digital 3-D.
The announcement follows years of turmoil, including lawsuits, MGM's bankruptcy and the departure of the original director, Guillermo del Toro.
More recently, Sir Peter's production company, Wingnut Films, and New Zealand Actors Equity have been at loggerheads over the union's claim for a collective pay agreement. That led to warnings that The Hobbit might have to be filmed offshore.
The company and the union are declining to comment on this aspect. Nor is there any word on where the films will be shot.
The Hobbit will be a prequel to Sir Peter's successful Lord of the Rings trilogy, based on the books by J R R Tolkien. He, Ms Walsh and Ms Boyens have co-written the screenplays with Mr del Toro.
The announcement describes Sir Peter as a film-maker of incomparable ability and says that having him return to "Middle Earth" to produce and direct is a dream come true.
The Hobbit is being co-produced by New Line Cinema and MGM. Warner Bros will handle domestic distribution in the United States and MGM will distribute it internationally.
The statement says Sir Peter, Ms Walsh and Carolynne Cunningham are producing the films, with Ms Boyens as co-producer and Ken Kamins as executive producer.
The Lord of the Rings trilogy grossed nearly $US3 billion worldwide at the box office. In 2003 the final film, The Return of the King, swept the Academy Awards, winning all 11 categories in which it was nominated, including best picture.