Paramount Pictures chairman and chief executive officer Brad Grey announced the agreement in a statement Tuesday. Filming will start July 18 on the third installment in the action-adventure series, which is a remake of a popular 1960s TV show.
The film will be directed by J.J. Abrams, who joined the project last August, and will be produced by Cruise and his partner, Paula Wagner.
"Tom's history with Paramount has made for one of Hollywood's most successful relationships; the opportunity to continue our collaboration with him on `Mission: Impossible 3' is everything anyone in show business could hope for," Grey said.
The deal fell into place after Cruise agreed to adjust his lucrative profit participation deal and shave a budget that had swelled to as much as $185 million, the Los Angeles Times reported.
The movie will feature Cruise and co-stars Ving Rhames, Jonathan Rhys Meyers, Michelle Monaghan and Philip Seymour Hoffman. It is set for release on May 5, 2006.
The first "Mission: Impossible" movie came out in 1996 and was directed by Brian De Palma. John Woo directed "Mission: Impossible II," which was released in 2000.
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