It appears that Godzilla vs. Kong will be roaring for Warner Bros. after all. The studio is nearing a deal with Legendary Entertainment with respect to the release of Godzilla vs. Kong, sources tell The Hollywood Reporter.

An agreement means the parties are close to averting a potential legal confrontation over Warner Media’s surprise decision to put its entire 2021 slate on its HBO Max streamer on the same date that the films open in theaters. Warners' unprecedented Dec. 3 announcement caught all talent and filmmakers off guard and Warners is now engaged in negotiations with dozens of parties seeking compensation for potential loss of profit participation.

The $200 million-plus Godzilla is one of two Legendary films caught up in Warners' surprise move. The situation is more complicated for Dune, though the parties are said to be moving close to an agreement on that project as well. Filmmaker Denis Villeneuve has written passionately about his desire for an exclusive theatrical release and Legendary is backing him in that demand, according to a knowledgeable source. That film is set for an October release, meaning that theaters may once again be operating as millions are vaccinated.

According to a source, conversations regarding various theatrical windowing approaches are ongoing and it remains unclear which option will be acceptable to Villeneuve. Another potential issue: It appears Warners may have been using Dune images to promote its streaming service without approval.

A spokesperson for Legendary declined to comment.

If Warners gives Dune an exclusive release, that could set a precedent allowing others, such as Matrix 4 filmmaker Lana Wachowski, to demand similar treatment. As talks continue, it is unclear whether Warner Media will be able to hold the line on its day-and-date strategy to bolster its streaming service. Wachowski is said to be adamant about an exclusive theatrical run.

Legendary was considered the likeliest of Warners’ financing partners to pursue litigation following the studio’s surprise decision. It financed 75 percent of Godzilla and was prepared to accept a $225 million-plus Netflix offer for the film. Warners blocked that deal.

Legendary could have argued in challenging the Warners decision that in unilaterally putting the film on its own streamer, Warner Media was self-dealing. But Netflix's November bid effectively set the price for Godzilla, simplifying that negotiation. Legendary is still negotiating with talent on Godzilla but that is not expected to derail a deal. The movie will keep its May 21 release date in theaters, including IMAX, as well as HBO Max. Legendary will release the film in China.

Adam Wingard, known for Netflix's Death Note and horror films such as You're Next and The Guest, directed Godzilla vs. Kong. It stars Alexander Skarsgard, Millie Bobby Brown, Rebecca Hall and Kyle Chandler.

Aaron Couch contributed reporting.