Filming on the project, which wrapped up in Queenstown and Wanaka just before Christmas, was to resume next week in Wellington and Waikato.
Producer Barrie Osborne said Sir Ian was settling in and preparing by working with make-up artists and wardrobe fitters.
Author Robert Foster, in his book The Complete Guide To Middle Earth, described Gandalf as "a grey-cloaked, grey-haired bent old man ..(who) passed easily for a meddlesome old conjurer; (but) at times, he revealed his true majesty and power".
In the trilogy, Gandalf was the second most powerful wizard, behind Saruman - being played by Christopher Lee - in a group of wizards called the Istari.
Sir Ian is a verteran of both stage and screen, having starred in more than 50 films, including And The Band Played On (1993), Richard III (1995) and Gods And Monsters (1998) for which he received an Oscar nomination last year.
Knighted in 1990, Sir Ian made his name performing Shakespeare on the British stage and joins a cast that includes Liv Taylor, Sir Ian Holm, and Elijah Wood.
Meanwhile publicists of new low-budget New Zealand-made feature film Stickmen, wich starts shooting in Wellington later this month, issued a tongue-in-cheek release yesterday saying Sir Sean Connery was neither confirming nor denying he would be part of the project.
Last year there was widespread media speculation that Sir Sean was the leading contender to be Gandalf in The Lord Of The Rings.
Stickmen, about billiards players, was written by Wellingtonian Nick Ward and is to star John Leigh - Lionel Skeggins from Shortland Street. The film is part of the ScreenvisoNZ deal between the New Zealand Film Commission, New Zealand On Air, TVNZ, and Portman Entertainment.