Director Peter Jackson, who helmed The Lord of the Rings trilogy, has united with DreamWorks studio after a week of heated negotiations with several Hollywood studios over his adaptation of the bestselling book, The Lovely Bones.

DreamWorks released a statement late Friday saying the film will begin shooting in October in Pennsylvania and in Jackson's native New Zealand.

Peter Jackson, seen here accepting the best picture Oscar for The Lord of the Rings: The Return of the King, snubbed his collaborator on the Tolkien trilogy, New Line, for his next project.
(Associated Press)

"When you read an emotionally magical story that cries out to be turned into a major motion picture, you hope its winding path can find its way to the door of your own company. Peter Jackson has made this possible and I'm so grateful to him," said Steven Spielberg, who co-owns DreamWorks, in a statement.

The book, written by Alice Sebold and published in 2002, concerns the observations of a dead girl, 14-year-old Susie Salmon, who has been raped and killed but continues to monitor her family and their search for her killer.

The novel has sold more than 10 million copies worldwide and remained on the New York Times hardcover list for more than a year.

Jackson co-wrote the screenplay with Philippa Boyens and Fran Walsh, his collaborators on The Lord of the Rings movies.

"Alice Sebold's story affects readers in deeply personal ways and the most important consideration for me was finding a studio partner who felt an equally strong connection with the book. Not just in sharing our emotional reaction to the story, but our desire to see it told in an original, adventurous way on screen," said Jackson.

Reports out of Hollywood were bristling this week after Jackson began shopping his screenplay to the studios. New York magazine said bidding on the project was expected to top $65 million US. Some reports say that number is closer to $70 million US.

Jackson reportedly sent the script to every studio, large and small, except New Line. The director, who won Oscars for directing, producing and writing The Lord of the Rings: The Return of the King, has been fighting the studio over profits concerning the three Lord of the Rings films.

Last November, Jackson told fans on his website that he would not be directing The Hobbit, for which the rights are held by New Line, because of his company's continuing dispute with the studio.