Director Guillermo del Toro leaves "The Hobbit"/J.R.R. Tolkien/Peter Jackson, Fran Walsh and Phillippa Boyens

LOS ANGELES (Hollywood Reporter) – After spending the last two years developing "The Hobbit" as his latest directing project, Guillermo del Toro has stepped down as director of the J.R.R. Tolkien adaptation amid studio delays and schedule conflicts.

"In light of ongoing delays in the setting of a start date for filming "The Hobbit," I am faced with the hardest decision of my life," Guillermo wrote in his announcement on "Lord of the Rings" fansite TheOneRing.net. "After nearly two years of living, breathing and designing a world as rich as Tolkien's Middle Earth, I must, with great regret, take leave from helming these wonderful pictures."

He said he would continue to co-write the screenplays with Peter Jackson, Fran Walsh and Phillippa Boyens.

The walls started to crumble for del Toro in recent weeks as the uncertain financial future of MGM put the project, which was to have been two movies, in limbo. The producers had been hoping to be in production this summer but no greenlight was forthcoming.