Direct detection and spectral characterization of extrasolar planets is one of the most exciting but also one of the most challenging area in modern astronomy. For its second generation instrumentation on the VLT, ESO has supported two phase A studies for a so-called dedicated instrument. Based on the results of these two studies, a unique instrument is now considered for first light in early 2010, including a powerful extreme adaptive optics system, various coronagraphs, an infrared differential imaging camera, an infrared integral field spectrograph and a visible differential polarimeter. We will briefly summarize the science objectives and requirements, describe the proposed conceptual design and discuss the main limitations and corresponding instrumental issues of such a system. We will also derive the expected performance of the proposed Planet Finder and present the project organization.