New Line Cinema and MGM Studios have announced that they have reached an agreement with Peter Jackson and Fran Walsh to executive produce a film version of 'The Hobbit'. A director has yet to be named, but it has been confirmed that there will be two films, shot simultaneously: 'The Hobbit' and a sequel; filming is expected to begin in 2009, with the films slated to be released in 2010 and 2011 respectively. It was also announced that the legal dispute between Jackson and New Line over earnings from the Lord of the Rings trilogy, which had put Jackson's involvement with the project in doubt, has been resolved. Read more at the Official Hobbit Movie Blog.
Source: Council of Elrond
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