A follow-up to the martial arts classic Crouching Tiger, Hidden Dragon will be filmed in New Zealand.
The eagerly-awaited sequel will have Malaysian star Michelle Yeoh reprising her role from Ang Lee's Oscar-winning 2000 film.
She will star alongside China's biggest action star Donnie Yen in the movie to be directed by Woo-ping Yuen, who was the action co-ordinator on the first movie and whose credits include 40 years of stunt work in martial arts films.
It is understood preproduction has started on Crouching Tiger, Hidden Dragon II — the Green Destiny and shooting will begin in July.
Filming will be done at the Auckland Film Studios in Henderson, site of high-profile productions including the Chronicles of Narnia films, Emperor, Xena: Warrior Princess and Hercules.
The new film is being produced by Hollywood studio the Weinstein Company, with Auckland-based Iron Knight Productions. The production team in Auckland and co-producer David Thwaites in Los Angeles declined to comment.
But Graham Dunster of Auckland Actors said much of it would be shot in Auckland, and the rest in China.
He said it would be good for the New Zealand film industry: "Hell, yeah. This is the first international production we've had in 18 months."
The first Crouching Tiger film is the most internationally successful Chinese film, making $148 million in the US and $247m worldwide.
The producers would have been attracted to New Zealand by the Government's taxpayer-funded incentive, which took effect this month.
It allows movie makers to claim back 20 per cent of their expenditure, to be paid by the Ministry of Business, Innovation and Employment. Under the previous rules, big-budget films could reclaim 15 per cent.
But foreign productions are not required to hire local people. "So the film will still be a benefit for New Zealand generally but perhaps not too much for individuals," Dunster said.
Auckland Tourism, Events and Economic Development chief executive Brett O'Reilly said the film would be a "huge boost" for New Zealand's film industry, and the economy.