Much of the filming of a prequel to Oscar-winning martial arts film Crouching Tiger, Hidden Dragon will reportedly be done in Auckland.
Industry publication Variety said much of the principal photography would be filmed this year at Auckland Film Studios. Two weeks' shooting would also be done in China.
Shooting a big-budget film in New Zealand unlocked substantial production incentives, Variety said in a report from Beijing.
Under new rules introduced at the beginning of this month, called the New Zealand Screen Production Grant, feature films which spent more than $15 million in this country could receive a rebate of 20 per cent of local expenditure. Under previous rules the rebate was for 15 per cent, Variety said.
The Weinstein Company's Crouching Tiger Hidden Dragon II – The Green Destiny will star Michelle Yeoh reprising her role as female warrior Yu Shu Lien. It will be directed by Yuen Woo-ping, a veteran martial arts ace who was action choreographer for the original 2000 film.
Producers seriously considered filming at the new Pinewood Iskandar Malaysia studios, but that facility was occupied until the end of the year by the TWC-produced Marco Polo television series for Netflix.
New Zealand's Iron Knight Productions was expected to co-produce, Variety said.
With screenplay by John Fusco, The Green Destiny was a prequel to the Ang Lee-directed film and drew on several of the same series of books by Wang Dulu that the first film used as source material.
The BBC said plans for a prequel had been delayed by a row over the film rights to Wang's novels. Pre-production of The Green Destiny was believed to have started.
Crouching Tiger, Hidden Dragon remained the most successful Chinese-language film, making nearly $250m on its release.
It won the best foreign-language Oscar the following year, with three more awards in technical categories.