New Zealand will reprise its starring role as Middle Earth with confirmation Amazon Studios will film its new Lord of the Rings television series on its shores.

The country – where Sir Peter Jackson filmed the original Lord of the Rings and Hobbit movies – beat rival Scotland to be named the production location for the series, set to be the most expensive TV show ever made.

Filming for the NZ$1.3bn (£660m) series is slated to begin in the coming months at three sites across Auckland in the North Island. The capital Wellington had been considered but was ruled out due to all available studio space being taken up by Hollywood director James Cameron, who is filming his four Avatar sequels there.

The deal is seen as a win for the New Zealand film industry and a coup for the government, which had been involved in months of negotiations with Amazon while it weighed up location options.

Phil Twyford, New Zealand’s economic development minister, described the “ambitious production” as fantastic news for the country, and said it would create jobs and significant overseas investment.

It was New Zealand’s “majestic” scenery that could match the “primordial beauty” of Middle Earth that helped clinch the deal, showrunners and executive producers JD Payne and Patrick McKay told news website Stuff.

That will be of little comfort to Scotland, which had been in the frame as a front-runner, with reports that uncertainty over Brexit saw it fall out of favour with Amazon.

While precise plot details of the new series have been kept a closely guarded secret Amazon has revealed that the series will be set during the 3,441-year period before the events of The Fellowship of the Ring, with rumours the script will focus on a young Aragorn, played by Viggo Mortensen in the film trilogy.

A JRR Tolkien expert working on the adaptation claimed in August that Amazon had been refused permission by the estate to use the bulk of the book’s plot.

Filming of the Lord of the Rings and Hobbit films was marred by controversy in New Zealand over the so-called “Hobbit Law”, which barred film contractors from collectively bargaining, and later overcrowding at tourist hotspots connected to the films.

The Hobbit Law provoked street protests back in 2010 when the then National-led government in effect made it illegal for film industry workers to collectively bargain. The urgent law was prompted by threats from Jackson and Warner Bros. to take the shooting of the films to offshore locations.

This new billion-dollar deal may not be without its own cost to New Zealand ratepayers, with government film subsidies offering a rebate of up to 25%. That is sure to raise the ire of the New Zealand Taxpayers’ Union, which has previously warned against what it saw as “international bidding wars using taxpayers’ money”.

In 2018 the NZ Herald reported the subsidy scheme had paid out NZ$161m to Jackson for the director’s Hobbit trilogy.