Hollywood director James Cameron's purchase of more than 1000ha of land in south Wairarapa has divided politicians but been given the green light by our top farming lobby group.

The Avatar, Titanic and Terminator director has bought two farms in the area - Land Information New Zealand documents show sales have been approved by the Overseas Investment Office for two blocks, of 817ha and 248ha at Western Lake Rd.

The purchase is believed to have cost Cameron $20 million, Fairfax Media reported.

The land was sold to Anglin Classics, a firm owned by Cameron. The value of the sale is confidential.

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In a statement, the Cameron family said they were "thrilled to be making a new home in New Zealand".

"We love the rugged landscape and the spirit of the people here, and are looking forward to becoming resident on our beautiful farm. We hope we will be accepted as good neighbours and good members of the community in South Wairarapa."

Cameron intended to reside indefinitely in New Zealand according to his application, and would live at the property, which he would work as a farm.

Peters, Shearer question deal

But the land deal has stoked political debate and comes only days after the sale of Crafar farms to Chinese interests.

New Zealand First leader Winston Peters said: "To reside in New Zealand indefinitely, well, what does that mean? Full-time, part-time? ... If someone was coming to live in New Zealand and become a New Zealander, that is a different matter."

Mr Peters criticised the decision as typical of the "stupidity" of the Government and the "rubber-stamp merchants" at the OIO.

"If [the applicant] was bringing some expertise to expand this country's export wealth, particularly if it was land to be developed, or better utilised, that would be a different matter.

"But what is the new investment here? It's just a land purchase," said Mr Peters.

Labour said it approved of Cameron's purchase as long as he intended to stand by his statement to live here indefinitely.

However party leader David Shearer told 3News New Zealanders "do not want to be sharemilkers on foreign owned land".

"It doesn't matter whether [buyers] are James Cameron or Chinese," Mr Shearer said.

But Federated Farmers president Bruce Wills backed the application and said the Cameron family would be farming the land, and his organisation would be pleased to have them as members.

"There's much we'll be able to do in helping them settle into the Wairarapa and into farming.

"I also think the global attention this will bring to New Zealand farming, especially to sheep and beef, will be extremely positive."

Prime Minister John Key said the legislation was "about right", but he would strengthen the law if he thought too much New Zealand land was being sold.

Cameron joins a growing list of Hollywood heavyweights who call Wairarapa home.

Sir Peter Jackson and Fran Walsh, who together helped create the Lord of the Rings trilogy, live in a multimillion-dollar estate on the edge of Masterton.

Filmmaker, author and artist Vincent Ward owns a home in Greytown.

South Wairarapa farming couple Bill and Annette Shaw struck the deal for the larger Pounui farm overlooking Lake Onoke.

Mr Shaw said confidentiality was a condition of sale.

"I don't have a clue who bought it and what they're going to do with it. I can't discuss it," Mr Shaw said.

He confirmed the purchasing company as Anglin Classics.

Heather and Rob McCreary sold the smaller lot to Anglin Classics in the same deal and Mrs McCreary declined to comment as well.

Cameron is expected to start work on the first of two sequels to Avatar later this year.