As Deadline notes, Miller who directed the original comic book hit for Fox, had not officially signed on to helm the sequel but was developing the script and had planned on returning.
The split is said to be amicable with Fox now moving Miller onto a new film based on the Daniel Suarez novel Influx.
Miller worked closely with Reynolds on the first film and is rumored to have been the one behind the leaked Deadpool footage that led to Fox greenlighting the film following positive feedback from fans.
Deadpool 2 is expected to hit theaters in 2018 with Reynolds once again returning as the foul-mouthed mutant mercenary and as a producer.
The original Deadpool, released in February, was a box-office hit having grossed $786 million worldwide.