Executives at 20th Century Fox announced Wednesday that Cameron has settled on two sequels to the blockbuster hit as his next film projects, with plans to begin production in late 2011.
The studio hopes to have the first of the as-yet-untitled sequels in theaters in December 2014, with the third movie in the franchise following in December 2015. Like the first film, the sequels will be shot in 3-D.
Cameron will decide whether to shoot the films back-to-back after he completes the scripts for the sequels to his sci-fi sensation. Set on the distant Pandora, "Avatar" is the biggest modern blockbuster, with $2.8 billion at the box office worldwide.
"In the second and third films, which will be self-contained stories that also fulfill a greater story arc, we will not back off the throttle of `Avatar's' visual and emotional horsepower, and will continue to explore its themes and characters, which touched the hearts of audiences in all cultures around the world," Cameron said in a news release.
"I'm looking forward to returning to Pandora, a world where our imaginations can run wild."
Cameron had been up in the air on what he would do next, telling reporters as recently as last week that he had not decided whether to shoot another film before returning to his "Avatar" saga.
At an event a week ago to show off the technology used to make "Avatar," Cameron speculated about how long it might be until the next installment would hit theaters.
"I made two very effective sequels in my career. One was `Aliens,' and one was `Terminator 2.' `Aliens' came out seven years after the first film. `Terminator 2,' seven years after the first film. I'm not saying that we're planning on seven years," Cameron said of "Avatar."
If Cameron meets the 2014 deadline, it will be just five years after "Avatar" arrived last December.
"Avatar" follows the adventures of a man in alien form (Sam Worthington) who falls for a 10-foot, blue-skinned native (Zoe Saldana) of the distant moon Pandora, where greedy humans wage war over the land's natural resources.
While "Avatar" was set in the exotic jungles of Pandora, "Titanic" director Cameron plans to bring his love for deep-sea exploration into the next chapter, setting some of the action in the moon's oceans. He would not reveal plot details.
"That's classified," Cameron said.
"Avatar" blended live action with performance-capture, scenes shot on a soundstage with actors in skintight suits covered in sensors that allow digital cameras to record their movements. Visual-effects artists later transformed them into the alien creatures and filled in landscapes and other details.
Jon Landau, Cameron's producing partner, said last week that they would only proceed with an "Avatar" sequel when the script and story were right.
"Jim has done a couple of sequels in his career, and both times he's done them, I would argue they lived up to at least what the first movies were," Landau said.
The studio was anxious to get back into the "Avatar" business.
"We had no higher priority, and can feel no greater joy, than enabling Jim to continue and expand his vision of the world of `Avatar,"' Fox studio bosses Jim Gianopulos and Tom Rothman said in a statement.