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.

That put pressure on del Toro, who has a laundry list of projects outlined for the next 10 years, in a position of cutting bait or staying on for more uncertainty. The director moved his wife and children to New Zealand for the shoot, and the first movie was aiming for a December 2012 release.

"The blessings have been plenty, but the mounting pressures of conflicting schedules have overwhelmed the time slot originally allocated for the project," said del Toro in his statement. "Both as a co-writer and as a director, I wish the production nothing but the very best of luck and I will be first in line to see the finished product. I remain an ally to it and its makers, present and future, and fully support a smooth transition to a new director."

Jackson stated he understood del Toro's position: "We understand how the protracted development time on these two films, due to reasons beyond anyone's control ... has compromised his commitment to other long term projects. The bottom line is that Guillermo just didn't feel he could commit six years to living in New Zealand, exclusively making these films, when his original commitment was for three years."

Jackson said development on "Hobbit" would continue apace, although his statement did not specifically address any possible postponement of the release date.

"New Line and Warner Bros. will sit down with us this week, to ensure a smooth and uneventful transition, as we secure a new director for the Hobbit. We do not anticipate any delay or disruption to ongoing pre-production work," he said.