Wellington, Aug. 4 (AP): A new movie from Hollywood Director James Cameron, the sci-fi epic ``Avatar,'' will feature the magic of New Zealand's visual effects studio Weta Digital, local media reported on Friday.

The special effects studio in the capital, Wellington, will produce computer-generated visual effects for Cameron's US$200 million (euro156 million) epic, set for release in 2008, the Dominion Post newspaper reported.

The film is about a war veteran fighting aliens on another planet, and visual effects will dominate the movie, Cameron was reported as saying earlier.

Among the techniques to be used is one refined by Weta Digital known as ``performance capture animation'' in which an actor's movements form the basis for a computer-generated character.

The technique was used by the studio to create the creature Gollum in ``The Lord of the Rings'' trilogy and the giant ape Kong in ``King Kong,'' all four directed by Oscar-winning New Zealand director Peter Jackson.

Weta Digital is owned by Jackson and Oscar-winning special effects duo Richard Taylor and Jamie Selkirk.

Studio spokesman Joe Letteri told the newspaper that Avatar would also require the studio to develop new techniques. He did not specify what they would involve.

Live-action scenes for Avatar are to be shot in the United States.

Cameron visited the studio complex in Wellington last month.

His film ``Titanic,'' released in 1997, remains the highest-grossing movie of all time.

Film New Zealand chief executive Judith McCann said the decision confirms Weta Digital as a leader in creative and digital production.

``It underlines its growing stature among the global players in the industry,'' she told National Radio.