Back before MGM settled its bankruptcy issues, The Hobbit seemed doomed to linger in development limbo for an indefinite period of time. Now Peter Jackson is pressing on full steam ahead with the project, signing on several faces both new (Martin Freeman as Bilbo Baggins) and old (Cate Blanchett and Orlando Bloom as the elves Galadriel and Legolas, respectively).

Today there’s (thankfully) even more good news – Warner Bros. has secured a deal with MGM that will allow the former to handle worldwide theatrical and video distribution of The Hobbit – while the latter retains international television rights.

Warner Bros. signed a deal with IMAX last year that will see The Hobbit screened in the massive screen format when Part 1 arrives in 2012, followed by Part 2 a year later. Now the studio will also distribute and market the films around the globe, since MGM’s bankruptcy deal revives the studio as a production company that contracts out said rights. Deadline has learned that Warner Bros. will also provide all of the funding for Jackson’s Lord of the Rings followup, the total production budget of which is predicted to be upwards of $500 million to cover both movies.

The Hobbit screenplays have been finished, revised, and polished by the likes of Jackson; his LOTR trilogy co-writers Fran Walsh and Phillippa Boyens; and former Hobbit director Guillermo del Toro as well. Now that the project is set to be filmed in New Zealand, Jackson and his crew are jumping head-first into this thing – as well as using state of the art RED EPIC 3D camera technology to create a final product that will fully immerse moviegoers into the world of Middle-Earth beyond the experience of even the blockbuster LOTR series.

'The Hobbit' will allow audiences to revisit locations like The Shire.

While it’s not yet been revealed if Ian McKellan and Andy Serkis will be reprising their roles as Gandalf the Grey and the miserable creature Gollum in The Hobbit, their involvement seems all but guaranteed at this point. Once their roles in the upcoming Tolkien adaptations are officially confirmed, there will be nothing left to look forward to but the movies themselves – and isn’t that quite a relief?

The Hobbit: Part 1 is scheduled to reach regular, 3D, and IMAX 3D theaters on December 19th, 2012. Part 2 will arrive a year later in December of 2013.

Source: Warner Bros. (via Deadline)