Director Peter Jackson, New Line Cinema and Metro-Goldwyn-Mayer Studios have agreed to make two movies based on JRR Tolkien’s book The Hobbit, ending months of legal wrangling.

Bob Shaye and Michael Lynne, co-chairmen and co-CEOs of New Line, says Jackson - the director of the smash hit Lord of the Rings series - and producer Fran Walsh will both executive produce a Hobbit movie and a sequel, but no decision has been made about who will direct the films.

According to IMDB the first Hobbit movie is scheduled for 2009.

Source: ABC News (Australian Broadcasting Corporation)