Fox’s X-Men spinoff The Wolverine will be shooting in Sydney come August instead of Japan or Canada, industry trade site IF.com reports. Thanks to a $12.8 million Australian government payment and other incentives, location offset and payroll tax relief helped seal the deal. One-off payments like this are unusual. The Wolverine would have received more taxpayer funding but it didn’t qualify for the higher 40% producer offset, according to U.S. line producer Joe Caracciolo. That’s because it was not deemed an Australian production despite Jackman’s involvement as producer and star. Producers also considered shooting in Japan and Canada, but Caracciolo said the numbers added up for Fox to shoot in Sydney, which is standing in for Japan. James Mangold is directing. Lauren Shuler Donner and John Palermo are also producers. Deputy premier and minister for trade and investment Andrew Stoner said the production is expected to spend $80 million locally. X-Men Origins: Wolverine was also shot in New South Wales, Stoner pointed out. A significant portion of the visual effects will also be handled Down Under, but most post-production work is expected to take place in the United States. Fox has slated The Wolverine for release in July 2013.

Get Deadline news and alerts sent to your inbox.