The title was due to be set in Italy during World War II, with a third-person viewpoint and squad-based mechanics, according to The Verge.
Work started five months before the release of the original Modern Warfare before being cancelled after nine months of development in March 2008.
A vertical slice that showed around 15 minutes of gameplay was created to show to publisher Activision, which moved away from Call of Duty's traditional cinematic approach.
"[The vertical slice] didn't have a whole lot of [cinematic moments]," said designer James Schomer. "But I think a lot of that was planned. We were aware of the cinematic nature that Call of Duty was trending towards. But it was not part of the original demo. It was a 'this is what we're shooting for' sort of thing."
Despite it being favoured by Activision bosses, Modern Warfare's strong sales and Vivendi / Blizzard saw the project scrapped.
> Call of Duty: Modern Warfare 3 review
"As is normal in a merger, you do everything you can to clean up your balance sheet," revealed lead designer Kyle Brink.
"A studio that isn't in full production on a title with major revenue attached to it, which is about to ask for tens of millions in development dollars, is a great candidate for closure at that point.
"Was this also a way to keep IW happy after they had just produced Modern Warfare and made a hojillion dollars? Perhaps, but nobody ever put it to us that way."
A third-person Call of Duty has been rumoured for several years now, but the franchise has maintained its first-person roots.
Call of Duty: Modern Warfare 3 was released in November and has broken Avatar's record as the fastest-selling piece of entertainment, but failed to topple Adele as the UK's best-selling entertainment property in 2011.
View a television advert for Modern Warfare 3 below: