The two films based on 'The Hobbit' have been given the green light and will begin principal photography in February under the direction of Peter Jackson, Xinhua reported.
The joint announcement was made on Saturday by New Line Cinema, Warner Brothers and MGM.
It's not known whether the film, which is reported to become the most expensive ever made, will be shot in New Zealand.
It had been widely speculated that Peter would direct the film after Mexican film-maker Guillermo del Toro quit in May due to delays on a starting date, in part due to financial problems with one of its backers, MGM.
"Exploring Tolkien's Middle-earth goes way beyond normal film- making experience," Peter Jackson said in a statement. "It's an all-immersive journey into a very special place of imagination, beauty and drama."
The two films are expected to cost about 500 million U.S. dollars to make, and will be made in 3-D.
Jackson, who co-wrote the screenplays with wife Fran Walsh, Phillipa Boyens and del Toro, will direct the two movies back-to- back.