Universal Pictures is re-tooling the follow-up as a spinoff to focus on Chris Hemsworth's huntsman character, rather than a sequel with both Hemsworth and Stewart, the report said.
The decision was made after Stewart and Rupert Sanders, the married director of "Snow White," publicly apologized to their respective romantic partners for their affair.
The Hollywood Reporter said Sanders is expected to return to helm the second "Huntsman" movie, but screenwriter David Koepp is leaving the project since it is taking a new course.
Universal did not respond to a request for comment on the recent developments, the entertainment industry trade newspaper said.
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