Fox had agreed to have DreamWorks finance 50 per cent of production through its new funding relationship with Indian conglomerate Reliance Big Picture.
The film was expected to start production by early next year but it seems difficult with Spielberg's exit.
The project, an adaptation of Mary Chase's Pulitzer Prize-winning play about a man who befriends a six and half foot tall invisible rabbit, has been facing challenges since the director took it up last August.
The biggest challenge so far has been getting an actor to play Elwood P Dowd, the character played by James Stewart in the 1950 film.Spielberg wanted Tom Hanks to play the role but Hanks did not want to take up a role played by the iconic star.
The director and Fox spent several months courting Robert Downey Jr While but he did not commit.
The development has been a disappointment for Fox but they will continue working on 'Harvey' and could re-approach Spielberg and Downey.
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