Update: Deadline has confirmed that Jon Favreau will not direct Iron Man 3:
Favreau just wrapped Cowboys & Aliens and is about to embark on Disney’s Magic Kingdom and “is excited about the opportunity to go do his own thing” while Kevin Feige as the ultimate custodian of Marvel’s Iron Man franchise “sees it as an opportunity to bring some more fire to the franchise”.
Favreau is still attached as an executive producer to Jon Whedon’s The Avengers.
Original story follows below
Vulture is reporting that Iron Man / Iron Man 2 director Jon Favreau has informed Marvel Studios that he will not be directing Iron Man 3:
It’s unclear whether the impasse was financial or creative or both. One informed source hears that he was frustrated with Marvel’s urge to stuff more of their in-house heroes into the next film in the wake of The Avengers. In a recent interview with MTV News, Favreau explained that based on his conversations with Marvel Studios executives, he had no clarity as to what a third Iron Man film would even be about. “In theory, Iron Man 3 is going to be a sequel or continuation of Thor, Hulk, Captain America and Avengers,” said Favreau at the time, “This whole world … I have no idea what it is. I don’t think they do either, from conversations I’ve had with those guys.”
Vulture says Marvel and Disney “quietly began the process of finding a director to replace Favreau last night.” Iron Man 3 already has a release date set of May 3, 2013.
Favreau recently completed filming the sci-fi action film Cowboys & Aliens for Universal Pictures and is attached to direct Magic Kingdom for Disney.