Del Toro said he was moving to New Zealand for four years to work with Peter Jackson and his Wingnut Films and Weta brands. Both films will be shot back-to-back and will also be filmed in New Zealand, like Jackson's The Lord Of The Rings films.
A script hasn't been written yet, but it is believed that the The Lord Of The Rings team of Jackson, Fran Walsh and Philippa Boyens will all write the script alongside del Toro.
Stuff.co.nz also had this to say:
The official announcement was made in Hollywood by Lord of the Rings director Peter Jackson - who will co-produce The Hobbit - fellow producer Fran Walsh, and executives from New Line Cinema and MGM.
Jackson and Walsh said del Toro was "a genuine storyteller" of outstanding ability.
"A true original, Guillermo is a cinematic magician who has never lost his child-like sense of wonder. He understands that the fantastic must be grounded in the real and that all stories are only ever a reflection of ourselves," say Jackson and Walsh.
"We have long admired Guillermo's work and cannot think of a more inspired filmmaker to take the journey back to Middle-earth. We are delighted 'The Hobbit' is in such trustworthy hands."
It appears that, with the four years del Toro committed to this film, that these films might be aimed at release in late 2011 and 2012, respectively.