Variety claims that Epic Games is looking for a new home for the project after New Line chose to invest its resources in promoting the Hobbit film series instead.
Gears of War has been in line for a cinematic adaptation since 2007, with Len Wiseman attached to direct at one time. Stuart Beattie penned the most recent screenplay for the project.
Epic Games's shooter series debuted back in 2006 and has spawned three entries to date. It is one of the best-selling Xbox 360 properties, with the original alone selling more than 5 million copies.
The series's lead designer Cliff Bleszinski recently announced that he is parting company with Epic Games after 20 years with the studio.
A fourth entry in the series, titled Gears of War: Judgement, is slated for release next year.
Watch a trailer for Gears of War: Judgement below: