Rawson Marshall Thurber was to direct Elfquest, which was announced back in 2008. The project was based on the 1978 comic by Wendy and Richard Pini.
"After close to four years of suspense - and longer than four years of your much-appreciated interest and support - the word has come down from Warner Bros. And the word is 'no'," Wendy Pini wrote on the Elfquest Facebook page.
"Their simple explanation is that they don't want to compete with The Hobbit: An Unexpected Journey. This was a possibility, among several, that we were prepared for. It is a relief, at last, to know."
Elfquest began life as a self-published title before being picked up by Marvel Comics. More recently, DC Comics held the rights to the property.
Watch a trailer for The Hobbit: An Unexpected Journey below: