Ross co-wrote and directed "The Hunger Games," which has been No. 1 at the U.S. box office the last three weekends, raking in nearly $500 million in receipts worldwide since its release late last month.
The Hollywood Reporter said shooting on "Catching Fire" is scheduled to begin in August for an anticipated November 2013 theatrical release.
"Despite recent speculation in the media, and after difficult but sincere consideration, I have decided not to direct 'Catching Fire,'" Ross said in a statement.
"As a writer and a director, I simply don't have the time I need to write and prep the movie I would have wanted to make because of the fixed and tight production schedule," the filmmaker said. "I loved making 'The Hunger Games' -- it was the happiest experience of my professional life. Lionsgate was supportive of me in a manner that few directors ever experience in a franchise: they empowered me to make the film I wanted to make and backed the movie in a way that requires no explanation beyond the remarkable results. And contrary to what has been reported, negotiations with Lionsgate have not been problematic. They have also been very understanding of me through this difficult decision."
Lionsgate, the movie studio behind the big-screen adaptations of Suzanne Collins' best-selling young-adult novels, also issued a statement regarding the franchise's future.
"We're very sorry that Gary Ross has chosen not to direct 'Catching Fire.' We were really looking forward to making the movie with him. He did an incredible job on the first film and we are grateful for his work. This will not be the end of our relationship, as we consider Ross to be part of the Lionsgate family and look forward to working with him in the future," the studio's statement said.