Conservation minister Nick Smith says Three Foot Six Ltd has been granted consents for filming in the Mt Owen area near Murchison, the Wakatipu basin near town, the Te Anau area and Fiordland.
"The South Island is home to some of the most spectacular scenery in the world, and will make a wonderful backdrop for the Lord of the Rings," Dr Smith says.
"It's easy to imagine walking into a forgotten corner of Fiordland and coming across characters from the book."
Lord of the Rings producer Tim Sanders says the company is excited about moving south for filming.
"The dramatic scenery of these wonderful natural locations will be ideal for this film," he says.
"It's one of the reasons we chose to film the trilogy in New Zealand."
Nick Smith is confident the filming won't have a detrimental effect on the conservation areas involved, and on-site monitoring will be conducted.
The first of the Lord of the Rings trilogy will be released by New Line Cinema at the end of next year.