Guillermo del Toro to direct the upcoming The Hobbit

London's Guardian is reporting that Guillermo del Toro has signed on to direct Peter Jackson's upcoming film of J.R.R. Tolkien's The Hobbit.

The announcement was made at the French premiere of del Toro's new horror film, The Orphanage. He came to international attention with Pan's Labyrinth.

New Line Cinema has a reported budget of $150 million for the film, which is currently scheduled to begin production next year for a 2010 release.