Murro signed on to make his directorial debut on The Ring 2 in November but since that time has faced creative differences with the studio over the direction of the franchise and decided to step aside, sources said.
"This is a mutual parting based on two creative differences," DreamWorks co-head Walter Parkes said. "Noam Murro is an extraordinarily gifted director, and we intend without hesitation to try to work with him in the future."
It's unclear how Murro's departure will affect the start date or the involvement of Naomi Watts, who is attached to star in the movie, a sequel to the 2002 horror film about a sinister videotape. The 2002 film proved to be a sleeper hit, grossing nearly $130 million domestically.