James Cameron will be returning to New Zealand to film three sequels to Avatar, his enormously popular movie about the blue inhabitants of Pandora.

The director made the announcement Monday in the capital Wellington with producer Jon Landau and Prime Minister John Key. The films will be made by Lightstorm Entertainment and Twentieth Century Fox.

Avatar, released in 2009 and shot in New Zealand, won three Academy Awards and is the highest-grossing film in history, with an international box office take of nearly $2.8 billion.

Cameron plans to complete principal shooting on the three movies at one time, perhaps over a period of about nine months and beginning in 2015. He says the aim is to release the first sequel in time for Christmas 2016 and the following sequels in late 2017 and late 2018.

"It's quite a thrill to be officially saying that we're bringing the Avatar films to New Zealand," he told a news conference. "We had such a wonderful experience here making the first film."

3D, some scenes shot at 48 frames/second

Cameron said work has begun on the writing and design of the movies.

New Zealand's government has agreed to a 25 per cent rebate for the films, meaning it will pick up one-quarter of the tab. The agreement states that Lightstorm and Twentieth Century Fox will spend at least $413 million in New Zealand on the movies.

As is typical with blockbusters, Cameron declined to disclose a budget. But he did say he expects that economies of scale will help the three movies together cost less than $1 billion.

He said that he intends to make the movies in 3D and to shoot at least some sequences at 48 frames per second.

Films are typically shot in 24 frames per second. New Zealand director Peter Jackson shot his trilogy of The Hobbit at double that speed in an attempt to make the movies look more realistic and impressive. But the results of the technology have attracted mixed reviews from critics.

Key said the announcement comes with excitement and relief for the New Zealand film industry.

The industry had been facing a lull as work winds down on Jackson's trilogy.

"It's a day of great celebration," Key said. "It's a great Christmas present for those involved in making world-class movies."