The Oscar-winning director and his production company, DreamWorks, have departed the project, reported Deadline.
According to reports "Spielberg had a vision in his head for the movie that didn't align with the current budget" by Warner Bros, which led to his departure from the project.
The director is back in the market as "American Sniper" was to be his next project following the success of "Lincoln".
DreamWorks and Spielberg had joined Warner Bros to co-produce the film, written by Jason Hall. Cooper is also producing.
Kyle was killed at a shooting range by a fellow veteran in February.
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