The announcement by New Line Cinema and its parent company Warner Brothers confirmed Peter Jackson, who masterminded the multi-award-winning "Lord of the Rings" trilogy, as the director and said filming will begin next February.
A spokesman for New Line Cinema said no decision has been made yet on the location for the 500 million US dollar prequels to the "Lord of the Rings" but Warner Brothers president Alan Horn was emphatic Jackson would be at the helm.
Confirmation the two movies would go ahead came two days after New Zealand unions and filmmakers held "productive" talks on the row threatening "The Hobbit" but would not say if a boycott of the films had been lifted.
International actors’ unions slapped the ban on the production after Jackson refused to negotiate with NZ Actors Equity over minimum standards on the set, prompting the director to threaten to move the shoot from New Zealand.
The country’s stunning natural scenery was a key element in the look of the spectacular Lord of the Rings films.
"There is no human being on the planet as qualified as Peter Jackson to direct these films," Horn said in a statement.
"Peter is incredibly talented and has the creative vision and experience to bring this beloved property to life in a way that no other filmmaker could."
The statement said Jackson "will utilise groundbreaking visual effects" for the "Hobbit" movies which will be filmed in 3-D.
Jackson said that exploring Tolkien’s Middle-earth would go "way beyond a normal film-making experience. It’s an all-immersive journey into a very special place of imagination, beauty and drama."
With funding secured, the only apparent hurdle in the way of filming is the ongoing row between unions and producers over a collective contract for "Hobbit" actors.
Jackson has accused the unions of "bully boy" tactics, sparking allegations from actors that workers on his sets are being short-changed.
However, following the talks in New Zealand on Thursday a joint statement said all parties agreed "it was a useful and productive discussion".
The Hollywood studios backing Jackson have previously indicated if New Zealand is ruled out they are scouting alternative locations in Scotland, Ireland, Canada, Australia and eastern Europe.