Middle Earth fans can rejoice. It appears that ‘The Hobbit’ will be given the greenlight and begin production early in 2011. ‘The Hobbit’ will be broken into two different movies.

Word is that Peter Jackson, who helmed the original ‘Lord of the Rings’ films, will direct as well as produce.

The film will be financed by Warner Bros., its subsidiary New Line Cinema, and partner Metro-Goldwyn-Mayer. The status of MGM has been an ongoing sore spot, as the studio is near bankruptcy, and getting their backing (reportedly around $250 million) is critical. It appears, however, that the money is in place, and will allow production to begin.

The production of J.R.R. Tolkien’s classic fantasy novel has been wrought with problems, including the departure of original director Guillermo Del Toro. Warner Brothers and New Line had fought financial battles with Jackson as well as the family of the late Tolkien – saying they had been cheated out of profits from the film. Those issues all appear to be in the rearview mirror for ‘The Hobbit’.

The first film will be released in December 2012, and the second a year later.