Oscar-winning film director Peter Jackson and his team will produce the forthcoming film based on popular video game Halo.
Halo has sold more than five million copies
The director, who is reported to be an avid fan of Halo, will use his Weta production facilities in Wellington, New Zealand where the film will also be shot.
Alex Garland, author of popular novel The Beach, has written the script.
A director and cast are expected to be named in coming weeks.
Universal film studios, which will oversee the film's production and distribution, hinted that the movie will draw heavily on the game.
"The game is a good template," said Donna Langley, Universal's production president.
Halo has a complex mix of mythology, characters and worlds and follows the adventures of futuristic super-soldier Master Chief as he fights to save mankind from an alien race.
The game, originally released in 2001, has sold in excess of five million copies around the world. A sequel came out last year.
Peter Jackson is best known for his Lord of the Rings trilogy which was heralded as a movie triumph. On the Halo film Mr Jackson and his wife have been named as executive producers.
In a recorded clip shown at Microsoft's X05 Summit held in Amsterdam Mr Jackson said he had been playing Halo 2 in the evening while shooting King Kong and added that he "can't wait" to work on the film.
The Halo film is due to be released in mid-2007 by Universal Pictures and Twentieth Century Fox film studios.
It joins a growing trend of video games turned movies.
Lara Croft: Tomb Raider, Resident Evil and Doom have all already made it to the silver screen.
Microsoft has done well out of the Halo deal, receiving a reported payment of £2.8m plus 10% of movie ticket sales.
Bungie, the Microsoft-owned venture which developed Halo, said at the time it was looking for "someone who's as committed to the Halo universe as Peter Jackson was to Tolkien's Middle-Earth".