Peter Jackson has come a long way from his low-budget roots to being one of the most dominant film-makers in the world.

For his services to film - and many would argue his contribution to New Zealand goes much further than movies - Jackson has been awarded a knighthood in the New Year Honours.

The winner of more than a dozen Academy Awards is thrilled to be made a Knight Companion of the New Zealand Order of Merit.

"This is an incredible moment in my life. I didn't think anything would surpass the 2004 Academy Awards, but I was wrong," he said.

"The feeling of gratitude and pride I have in accepting this honour from my home country is profound."

Sir Peter was made a Companion of the New Zealand Order of Merit in 2002, and has "continued to excel in and significantly contribute to the New Zealand film industry", the citation for his knighthood reads.

The Lord of the Rings films raked in nearly $3 billion at the box office.

The Return of the King, the last of the trilogy, won 11 Academy Awards in 2004 - and shares the record for the most Oscars won by a single film.

Sir Peter is away until February, but was in New Zealand this month for the premiere of his latest movie, The Lovely Bones.

He remembers the early days: "When I was growing up in Pukerua Bay I spent weekends shooting war movies in my parents' vegetable garden with their Super-8 camera. I was 8 years old and had no real expectation of being a film director. My dream was to work on special effects.

"All those years ago, I never imagined where dreams could lead.

"One of the best things about growing up in New Zealand is that if you are prepared to work hard and have faith in yourself, truly anything is possible."

Since becoming a film-maker in 1976, Sir Peter's rise in the movie industry has been phenomenal.

He established the Weta Studios, production company Wingnut Films and in 2003 opened a film post-production facility, Park Road Post Production, in Wellington.

"Park Road Post Production has enabled Jackson and other film-makers to make films in New Zealand to an international standard," the citation said.

Sir Peter said: "I feel very lucky to be able to make movies in New Zealand and I will always be grateful for the support I have received from so many New Zealanders."

He sees the knighthood as "recognition of the collective achievement of our terrific crews and our film pioneers ... who trailblazed a path towards the creation of a modern Kiwi film industry".

Sir Peter financially supports local organisations such as the South Wellington Montessori School, Miramar North Primary School and the International Institute of Letters at Victoria University, and also backs the 48 Hour Film Festival and the Wellington Fringe Festival.

He is also the patron of the GiveLife New Zealand Organ Donation Awareness Charity.