Peter Jackson to direct 'wondrous' Hobbit in 3D

Fans of the Lord of the Rings trilogy can rejoice now that Peter Jackson has been announced as the director of the two-part prequel, The Hobbit.

Warner Bros. released the announcement Friday, ending months of rumours that the Rings' director would take over the helm of The Hobbit, which has been stuck in years of pre-production delays.

"Exploring Tolkien's Middle Earth goes way beyond a normal filmmaking experience We're looking forward to re-entering this wondrous world with Gandalf and Bilbo," said Jackson, referringto the two main characters of the prequel.

First published in 1937, The Hobbit was a precursor to the three Lord of the Rings books and focuses on the adventures of hobbit Bilbo Baggins in Middle Earth.

The statement did say filming would start in February but did not mention any locales.

The Hobbit has been in the works for years.Mexican filmmaker Guillermo del Toro had been tapped to direct, but left the project in May after working onit for nearly two years to work on his other films in development.

The project was to be executive-produced by Jackson in New Zealand. Jackson also co-wrote the screenplays with del Toro, his wife Fran Walsh, and Philippa Boyens.

The original delay had to do with the restructuring of MGM, which partnered with Warner Bros. to produce the project.MGM has been struggling with a massive debt.

Actors' unions hit Hobbit with a ban

Then, in early fall, The Hobbit was hit with a performers' ban after seven actors unions from around the world advised their members not to take roles

Under the umbrella of the International Federation of Actors or FIA, the unions say performers with the production, being shot in New Zealand where Jackson lives, have "struggled on non-union contracts" for years.

The federation said there are "no minimum guarantees of wages or working conditions," no residuals for future broadcasts and no cancellation payments. Jackson hit back by saying he'd pull the production from his homeland and move it elsewhere.

On Thursday, representatives of the New Zealand actors' union Equity, the Screen Production and Development Association and the Council of Trade Unions held a meeting to discuss their next step.

It ended with the resolution to "update the conditions of engagement for performers in the New Zealand screen production industry."

The situation remains up in the air.

The only other news divulged by the studio, which didn't giveany release dates,was the confirmation that the two movies, reportedly costing a total of $500 million US, would be shot back to back and in 3D.

"It's an all-immersive journey into a very special place of imagination, beauty and drama," promised Jackson.

The Rings trilogy grossed nearly $3 billion US worldwide.Its final film, Return of the King, nabbed 11 Oscars in 2003, including best picture.