Peter Jackson, the director of the Lord of the Rings triology, has settled litigation with New Line Cinema and will produce prequels to the film.

Jackson has signed on as executive producer to make two movies based on J.R.R. Tolkien's The Hobbit book. A director for the film has not been decided, according to New Line co-chairman Bob Shaye.

Metro-Goldwyn-Mayer Studios will help to finance and distribute the films, New Line said in a statement on Tuesday. MGM helped broker the settlement between Jackson and New Line, reported Bloomberg. Details of the settlement were not released.

Both parties had been mired in a legal dispute after Jackson sued New Line in 2005, alleging the studio had miscalculated the receipts of the Rings trilogy.

The pair of Hobbit films are due to be released in 2010 and 2011.