Director J.J. Abrams must now look for a new actor to portray the villain in his upcoming sequel Star Trek 2, as Benicio Del Toro has dropped out of the project.

We reported a month ago that Benicio Del Toro was the director's top choice to play the villain, but it seems the actor and Paramount couldn't agree on the financial terms of the deal.

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There have been persistent rumors that the villain in Star Trek 2 will be Khan, who was portrayed by Ricardo Montalban in 1982's Star Trek II: The Wrath of Khan. This new report reveals Khan is in fact the Star Trek 2 villain, despite director J.J. Abrams recently denying the rumors.

J.J. Abrams is directing Star Trek 2 from a screenplay by Roberto Orci, Alex Kurtzman, and Damon Lindelof. Bryan Burk and David Ellison are producing.

Production is scheduled to begin on January 15, 2012.