Oscar-winning director Peter Jackson and his partner have bought a seaside stretch of land in Wellington to restore it to nature, they said in a statement Friday, scuppering a controversial development project.

The derelict former military base at Shelly Bay in Wellington harbor had been earmarked to become 350 apartments, a boutique hotel and a brewery.

But the US$298 million project divided local residents, and even sparked a nearly two-year occupation of the land by a Maori tribe opposed to the sale of the land for the project.

The project was scrapped after years of legal wrangling when Wellington-born Jackson and his partner, screenwriter and producer Fran Walsh, bought the land.

"It's a wonderful coastline that holds a great deal of cultural and historical significance," Jackson and Walsh said in a joint statement.

"Suffice to say we are looking forward to restoring the natural beauty of the bay."

The couple said that in the long term, they plan to "look at ways it could be used for both arts and recreation".

The price they paid was not given.

Jackson directed the "The Lord of the Rings" and "The Hobbit" blockbuster trilogies, which Walsh helped produce.