The Hobbit is to be made into three films after director Peter Jackson decided too much of the story would be lost if only two films were released.
Jackson said that given the richness of the story, he decided after wrapping up shooting recently in New Zealand that what was originally planned was not enough.
"It has been an unexpected journey indeed, and in the words of Professor Tolkien himself, 'a tale that grew in the telling'," Jackson said in a statement on his Facebook site.
The Hobbit, written by J.R.R. Tolkien, is set 60 years before his epic fantasy The Lord of The Rings, which Jackson made into three Oscar-winning films about 10 years ago.
"I'm delighted that New Line, MGM and Warner Bros. are equally enthusiastic about bringing fans this expansive tale across three films," Jackson said in a statement.
A spokesman for distributors New Line said the third Hobbit film would be released in the summer of 2014.
The first two Hobbit films, starring British actor Martin Freeman as Bilbo Baggins, have already been announced for release in December 2012 and December 2013.
"It is only at the end of a shoot that you finally get the chance to sit down and have a look at the film you have made," Jackson said on his Facebook page.
"We know how much of the story of Bilbo Baggins, the Wizard Gandalf, the Dwarves of Erebor, the rise of the Necromancer, and the Battle of Dol Guldur will remain untold if we do not take this chance," he added.
All three movies were being shot in digital 3D in New Zealand, which is home to Jackson's Weta Digital special effects house.
Jackson, his wife Fran Walsh, Philippa Boyens and Guillermo del Toro are listed as co-writers of the first two films.