Sir Ian McKellen will return as wizard Gandalf

Shooting of the long-awaited film version of JRR Tolkien's The Hobbit is set to begin in New Zealand in July.

Actor Sir Ian McKellen, who reprises his Lord of the Rings role as Gandalf the Grey, revealed casting is taking place in LA, London and New York.

Mexican-born film-maker Guillermo del Toro will direct the film and its proposed sequel.

The films will be prequels to the Lord of the Rings trilogy directed by Oscar winner Peter Jackson.

Jackson - together with his wife Fran Walsh - will produce the films, to be made back-to-back in New Zealand.

Writing on his official website, Sir Ian reports that shooting of the two films is expected to take more than a year, with Del Toro "now living in Wellington, close to the Jacksons' and the studio in Miramar".

McKellen added that the script was still being worked on, saying "the first draft is crammed with old and new friends, again on a quest in Middle-earth".

Del Toro's other films include Hellboy and Pan's Labyrinth

Del Toro, best known for the Hellboy movies, has called the directing role "an absolute dream come true".

His acclaimed Spanish-language fantasy Pan's Labyrinth won three Oscars and three Baftas in 2007.

According to studio New Line, the first film will be an adaptation of The Hobbit, the novel Tolkien published before his Lord of the Rings cycle.

The second will be an original story focusing on the 60 years between the book and the beginning of the Rings trilogy.