The 22-year-old actress, who was caught in a cheating scandal with the film's director Rupert Sanders, was slated to make an appearance in the follow-up movie, The Hollywood Reporter said.
As a replacement to the scrapped sequel, Universal has planned to make a sort of spin-off movie which focuses on Chris Hemsworth's Huntsman. Sanders might still be attached to helm the Huntsman movie.
"The studio is currently exploring options to continue the franchise," a source said.
The abrupt decision was made in the wake of Stewart and Sanders's headline-grabbing scandal. Universal initially planned to make two films featuring Stewart's Snow White and a movie focusing on Huntsman.
Before losing part in the "Snow White" franchise, Stewart decided to let go one of her upcoming movie projects "Cali".
She has recently landed a part in "Lie Down in Darkness", an adaptation of William Styron's 1951 novel about a dysfunctional Virginian Loftis family.
