Updated: 10:34 PM PST - Sources close to HitFix now reveal that Megan Fox was not fired, but quit the production.  Details here.

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Original Post:

How the mighty have fallen. Once heralded as the Cindy Crawford pin up queen of a generation, Megan Fox has had a rough 12 months.  After the mammoth success of "Transformers: Revenge of the Fallen," she was unable to open the Diablo Cody scripted horror comedy "Jennifer's Body."  Now, HitFix has confirmed that Megan Fox will not return to the "Transformers" franchise for the third installment. 

Director Michael Bay and Paramount Pictures decided not to pick up the actress' option for the sequel.  Fox portrayed the sexy girlfriend of Sam Witwicky (Shia Labeouf). Another actress will join the cast as a new love interest for the Autobot's biggest ally. The news was originally reported on Deadline.com.

It's unclear what ultimately drove Bay to this decision, but the controversy of her comparing working with him to "Hitler" certainly had to factor in.  Bay had seemingly tried to put out the flames by posting a "welcome back" message to the actress when he confirmed the picture in October, but Fox's recent interview with Allure magazine where she insisted she wouldn't overly tan her body for the role (as the director had requested) may have been the last straw.

Fox's next film, "Jonah Hex," opens on June 16.  She's also making an indie turn in the drama "Passion Play" alongside Mickey Rourke and Bill Murray which is expected to screen on the festival circuit later this year.

"Transformers 3" is currently scheduled to open July 1, 2011.

For a list of potential candidates to replace Fox, click here.

Look for continuing updates on this story as it develops on HitFix.