UPDATE, 8:56PM TODAY: Disney has just confirmed J.J. Abrams will direct Star Wars: Episode VII. Screenplay is written by Michael Arndt. Abrams, his longtime producing partner Bryan Burk, and Bad Robot are producing along with Kathleen Kennedy under the Disney/Lucasfilm banner. Lawrence Kasdan and Simon Kinberg are consulting. Kasdan was screenwriter on The Empire Strikes Back, Raiders of the Lost Ark and Return of the Jedi. Kinberg was writer on Sherlock Holmes and Mr. and Mrs. Smith.

From the release:

“It’s very exciting to have J.J. aboard leading the charge as we set off to make a new Star Wars movie,” said Kennedy. “J.J. is the perfect director to helm this. Beyond having such great instincts as a filmmaker, he has an intuitive understanding of this franchise. He understands the essence of the Star Wars experience, and will bring that talent to create an unforgettable motion picture.”

George Lucas went on to say “I’ve consistently been impressed with J.J. as a filmmaker and storyteller. He’s an ideal choice to direct the new Star Wars film and the legacy couldn’t be in better hands.”

“To be a part of the next chapter of the Star Wars saga, to collaborate with Kathy Kennedy and this remarkable group of people, is an absolute honor,” J.J. Abrams said. “I may be even more grateful to George Lucas now than I was as a kid.”

PREVIOUS, THURSDAY PM: Star Trek director J.J. Abrams will be helming the next Star Wars movie. “It’s done deal with J.J.,” a source with knowledge of the situation told Deadline today. Argo director Ben Affleck was also up for the gig, the source says. Despite saying publicly that he didn’t want to direct a new Star Wars, Abrams was courted heavily by producer Kathleen Kennedy to take the job. Expected in 2015, Episode VII will be the first new Star Wars movie since 2005′s Episode III: Revenge Of The Sith. Michael Arndt is writing the script for the first installment of the relaunch of George Lucas’ franchise by Disney. The company bought Lucasfilm in October for $4 billion, with the Star Wars franchise the jewel in the crown. At the time, CEO Bob Iger said three more Star Wars films were in the pipeline. (For more information visit the Star Wars site.) Abrams’ other space-based franchise sequel, Star Trek Into Darkness, comes out May 17. This weekend, the PGA will honor the Lost creator and Revolution producer with its 2013 Norman Lear Award For Television. Abrams is repped by CAA and Oasis Media Group.

Deadline's Dominic Patten - tip him here.