Sir Peter Jackson's Weta Digital film studio has sold its technology division to a US video game company for $US1.6 billion ($NZ2.3 billion).
Unity, which produces software for game developers and digital artists, has agreed to acquire the studio's tools, pipeline of work, technology and 275 staff.
Sir Peter Jackson said that together, Unity and Weta will make its incredibly powerful digital tools available to any artist.
"Weta Digital's tools created unlimited possibilities for us to bring to life the worlds and creatures that originally lived in our imaginations," said Sir Peter in a statement.
"Together, Unity and Weta Digital can create a pathway for any artist, from any industry, to be able to leverage these incredibly creative and powerful tools.
"Offering aspiring creatives access to Weta Digital's technology will be nothing short of game changing and Unity is just the company to bring this vision to life."
In the statement, Weta Digital said "Peter Jackson is also staying in New Zealand and continuing to make movies here. Weta Digital artists will remain in New Zealand."
Weta Digital's visual effects studio will remain a standalone New Zealand entity, known as WetaFX, and will become Unity's largest customer. It has about 1700 employees and will remain majority owned by Sir Peter.
"We are thrilled to democratize these industry-leading tools and bring the genius of Sir Peter Jackson and Weta's amazing engineering talent to life for artists everywhere," said John Riccitiello, President and Chief Executive Officer, Unity.
Weta Digital was founded by Sir Peter, Sir Richard Taylor and Jamie Selkirk in 1993, and has produced visual effects for films ranging from The Lord of the Rings series to King Kong, Avatar, Dawn of the Planet of the Apes and more.
It has also won six Academy Awards for best visual effects.
"Unity is the best at delivering world-class tools and technology to creators," said Prem Akkaraju, CEO of Weta Digital.
"Together we have the opportunity to make Weta Digital's award-winning, high-end artist pipeline and tools, which are in a class by themselves, accessible to a much broader audience of artists than what has been historically possible.
"Weta's goal has always been to inspire and motivate a whole new generation of creators and it's exciting to pass the mantle over to Unity."