Apple just announced that they would be relaxing some of their iOS development restrictions, particularly allowing for third party development tools to be used to create iPhone, iPod touch, and iPad apps.

Epic Games announced during Korea Games Conference that the freely available “UDK will be able to generate iOS applications!” Epic Citadel, a demo of the Unreal Engine’s ability to render high quality 3D games on iOS devices, was shown off early this month at an Apple Press conference.

The Unreal Development Kit already has quite a lot of developer support with 350,000 installations to date. You can learn more about Unreal Engine 3 and download the latest release here.

Full press release below, if you’re interested:

UNREAL ENGINE 3 FOR iOS DEVICES

From Mark Rein, @MarkRein on Twitter: We announced a few things at the Korea Games Conference earlier today.

• Over 1,000,000 people have downloaded and installed “Epic Citadel” from the iTunes App Store.
• The Unreal Development Kit (UDK) now has more than 350,000 installations, which is pretty amazing for a game engine.
• There are countless UDK applications from games to driving simulators to animated films. And soon we will be able to count mobile applications.
• We announced UDK will be able to generate iOS applications!
• We’ve demoed Unreal Engine 3 on Android w/ Tegra 2, and at KGC today we showed it on a Samsung Galaxy S device.

What this means is that UDK developers will soon be able to use the power of Unreal Engine 3 to create apps for iOS devices. If you check out the Apple Special Event from Sept. 1, you can see Mike Capps and Donald Mustard demoing “Project Sword,” our first game for iOS, being created at Epic’s Chair Entertainment. Just search for Apple Special Event Project Sword on YouTube.

“Dungeon Defenders” was one of our original showcase games used to demonstrate how to use the Unreal Development Kit. Trendy Entertainment, a small development shop in Florida, created several dev diaries and released the source code for the game so UDK developers could learn from their experiences. Recently, Trendy because a full Unreal Engine 3 licensee so they could develop “Dungeon Defenders” for Xbox LIVE Arcade, PlayStation Network and mobile platforms. Last week, they posted shaky cam footage to YouTube of “Dungeon Defenders” running on iPhone and Android.

• Watch the “Dungeon Defenders” iPhone/Android YouTube video at http://youtu.be/ASE5uScZolg.
• Download the UDK version of “Dungeon Defenders,” and try it for yourself, at http://www.udk.com/showcase-dungeon-defense.
• Learn more about the game at http://www.udk.com/showcase-dungeon-defense.

We’ll have more on UDK support for iOS devices coming soon. Check out Unreal Engine 3 on iOS devices for yourself by downloading Epic Citadel for FREE on the iTunes App Store at http://itunes.apple.com/app/epic-citadel/id388888815.

Epic Citadel supports the following iOS devices: iPhone 3GS, iPhone 4, third-generation iPod touch, fourth-generation iPod touch and iPad.

[Epic Games via Joystiq]