The prequels will be filmed back-to-back at Wellington's Stone Street Studios and on location in New Zealand. Director Jackson will shoot both movies in 3D, based on a script co-written with Fran Walsh, Philippa Boyens and Guillermo del Toro.
The Hobbit will take place 60 years before the events of the Lord Of The Rings trilogy, tracking the journey of Bilbo Baggins (Martin Freeman) as he joins a company of thirteen dwarves on a quest to reclaim the lost Dwarf Kingdom of Erebor from dragon Smaug.
Freeman will be joined in the cast by Richard Armitage (Thorin Oakenshield), Ken Stott (Balin), Graham McTavish (Dwalin), William Kircher (Bifur), James Nesbitt (Bofur), Stephen Hunter (Bombur), Rob Kazinsky (Fili), Aidan Turner (Kili), Peter Hambleton (Gloin), John Callen (Oin), Jed Brophy (Nori), Mark Hadlow (Dori) and Adam Brown (Ori).
Sir Ian McKellen and Andy Serkis will reprise their roles as Gandalf and Gollum, while Cate Blanchett (Galadriel) and Elijah Wood (Frodo Baggins) are also confirmed to return.
Jeffrey Thomas and Mike Mizrahi are recent additions to the cast as as Dwarf Kings Thror and Thrain respectively.
The Hobbit has experienced numerous production problems, including bankruptcy to its backers MGM, the departure of original director Guillermo del Toro and the threat of union strikes in New Zealand.
The Lord Of The Rings trilogy grossed $2.9 billion at the worldwide box office and collected 17 Academy Awards, including 11 wins for 2003's Return Of The King.
The first Hobbit movie is due for release at the end of 2012, with the follow-up arriving a year later in 2013.
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