woohoo.. AVATAR is coming to NZ

The next three Avatar films are to be made in New Zealand, the Government announced today.

Prime Minister John Key says it has signed a memorandum of understanding with Lightstorm Entertainment and Twentieth Century Fox which will see the James Cameron-directed films be made here.

Economic Development Minister Steven Joyce says the decision is "excellent news" for the screen industry and will provide hundreds of jobs and thousands of hours of work in the sector, as well as other parts of the economy.

The deal, which has been in the pipeline for two years, is expected to inject at least $500 million into the New Zealand economy.

The announcement will be a "very big boost" for the screen industry while the Government looks to source more New Zealand-sourced productions, Mr Joyce says.

• AT A GLANCE: Government screen industry changes

Cameron called the announcement an "historic day" for the film franchise.

"We had such a wonderful experience here making the first film, and obviously the result of all of the talent in New Zealand speaks for itself. It's a great pleasure for us to recreate that winning combination."

Cameron says the films are already in the writing and design phase with Weta Workshop and will all be shot at once - like the Lord of the Rings and Hobbit trilogies.

He says performance capture will take place in the second half of next year and says as much post-production will be done in New Zealand as possible.

The Avatar film releases are expected to be released around Christmas time in 2016 to 2018.

If the memorandum had not been signed with the Government, Cameron says he and Twentieth Century Fox would have "had to look cold and hard at the numbers".

"Business sense would have had to prevail and I'm glad that it never came to that."

Wellington mayor Celia Wade-Brown says the film deal is an early Christmas present for the city.

"We've already got more than 1000 production and post-production companies here," she says. "It means employment. It means our place on the map. It means a continuing stream of work for creative people."

She says Wellington's the "Middle of Middle-earth", and now it'll be known as Pandora too.

The Government also announced it will be boosting screen production incentives for both overseas and local productions to encourage more film and television to be made in New Zealand and develop a more sustainable industry.

Among the raft of changes is raising the baseline tax rebate from 15 percent to 20 percent. Productions which bring specific benefits to New Zealand may be entitled to an extra 5 percent rebate.

If the new Avatar films fulfil the requirements, they will qualify for a 25 percent rebate.

Labour Party arts, culture and heritage spokewoman Jacinda Ardern says the move is a "good first step" by the Government and a "much needed lifeline" for the industry.

However, the Government only acted after post-production facilities started closing their doors, she contends.

The next step will be to focus on the "languishing domestic industry".

"We have the opportunity to build a regime that is not focused on one big budget movie at a time, but that works for the whole industry and across the whole country. To do that, the Government must now consult with local industry players, especially those in Auckland."

The memorandum of understanding ensures:

• A commitment by both parties to grow the screen sector in New Zealand and to building a long-term and productive relationship between the Crown and Lightstorm/Twentieth Century Fox.
• Spending of at least $500 million on production activity in New Zealand, including most of the live action shooting and visual effects.
• Employment and skills opportunities for New Zealanders, including in head of department roles. Around 90 percent of live action crew are expected to be New Zealanders. Alongside this, an internship programme will be supported.
• New Zealand hosting at least one official red carpet premiere, and a featurette on New Zealand being included in DVDs and Blu-rays.
• An offer by James Cameron and Jon Landau to serve as founding members of a new screen advisory board, which will provide advice and guidance to New Zealand screen and film makers looking to succeed internationally.
• Marketing and promotion of New Zealand and its film industry alongside the three Avatar films, transferring technological know-how to New Zealanders, and retaining screen production infrastructure in New Zealand that could be used for industry training