UPDATE 7:20 AM: We just learned that James Cameron is telling Hollywood that Fox made a “huge” donation to his environmental green fund, and in return he committed to making the Avatar sequel and threequel his next films. That also caused him to withdraw from Sony Pictures’ Cleopatra with Angelina Jolie, even though he’d told the studio that he’d always wanted to film the Queen Of The Nile’s story.

WEDNESDAY 6 AM: With this move, Twentieth Century Fox effectively ties up James Cameron through December 2015, apparently putting a hold on Sony Pictures’ hopes for the director to helm a fast-tracked Cleopatra starring Angelina Jolie in 2012:

LOS ANGELES (October 27, 2010) __ Moving forward with the most anticipated films of the next decade, Fox Filmed Entertainment Chairmen Jim Gianopulos and Tom Rothman announced today that Academy Award®-winning filmmaker James Cameron has agreed to make AVATAR 2 and 3 as his next films.

Cameron, who had always viewed AVATAR as the creation of a new world and mythology, will begin work on the scripts early next year with an eye towards commencing production later in 2011. Cameron will decide if he will shoot the films back-to-back after he completes the scripts, but the release of the first, as yet untitled sequel, is targeted for December 2014, with the third film contemplated for a December 2015 release.

AVATAR 2 & 3 will be produced by Cameron and Jon Landau for Cameron’s Lightstorm Entertainment.

“AVATAR is not only the highest grossing movie of all time, it is a created universe based on the singular imagination and daring of James Cameron, who also raised the consciousness of people worldwide to some of the greatest issues facing our planet,” said Rothman and Gianopulos. “We had no higher priority, and can feel no greater joy, than enabling Jim to continue and expand his vision of the world of AVATAR. This is a great day in the history of our company, and we thank Jim, Jon Landau, Rae Sanchini and all of their team and all of our Fox colleagues throughout the world, who have made this possible.”

Commented Cameron: “It is a rare and remarkable opportunity when a filmmaker gets to build a fantasy world, and watch it grow, with the resources and partnership of a global media company. AVATAR was conceived as an epic work of fantasy – a world that audiences could visit, across all media platforms, and this moment marks the launch of the next phase of that world. With two new films on the drawing boards, my company and I are embarking on an epic journey with our partners at Twentieth Century Fox. Our goal is to meet and exceed the global audience’s expectations for the richness of AVATAR’s visual world and the power of the storytelling. In the second and third films, which will be self contained stories that also fulfill a greater story arc, we will not back off the throttle of AVATAR’s visual and emotional horsepower, and will continue to explore its themes and characters, which touched the hearts of audiences in all cultures around the world. I’m looking forward to returning to Pandora, a world where our imaginations can run wild.”

“It is very exciting to be teaming again with our partners at Fox to give audiences the opportunity to return to Pandora,” said producer Jon Landau. “With the first movie, Jim only scratched the surface of the stories he wants to tell and the creatures and world he wants to create. Now we will continue his vision.”

AVATAR is the highest grossing film of all time, taking in nearly $2.8 billion in worldwide box office. It is also the top-selling Blu-ray disc of all time. AVATAR won Golden Globe® awards for Best Motion Picture and Best Director; and was nominated for nine Academy Awards, including Best Picture and Best Director, and won Oscars for art direction, visual effects and cinematography.

AVATAR was written by Cameron from an idea he nurtured for over a decade, while working on the technology necessary to realize its wholly imagined world. Working with Joe Letteri and his team at Peter Jackson’s WETA Digital, Cameron created a fully immersive 3D cinematic experience of a new kind, where revolutionary technology that was invented to make the film disappeared into the emotion of the characters and the epic nature of the story.

AVATAR 2 & 3 will mark Cameron’s latest collaborations with Twentieth Century Fox, a relationship that spans 25 years and marks one of the most successful filmmaker-studio alliances in motion picture history. Cameron and Fox first joined forces in 1985 for Aliens, which became a sci-fi classic. Next came The Abyss, which revolutionized visual effects technology; and True Lies, a blockbuster starring Arnold Schwarzenegger. In 1996, Fox greenlighted Cameron’s Titanic, which became the most successful film in history, and won a record-breaking eleven Academy Awards, including Best Picture.

Lightstorm partner Rae Sanchini negotiated the deal on Lightstorm’s behalf.