The 23-year-old actress no longer will co-star in The Other Side, writer/director David Michaels told the site. "Our team simply chose to move on from Lindsay and we'll soon be announcing a replacement," Michaels said.
A source connected to the production of the film, however, told TMZ that Lohan was cut from the movie because she's not "bankable" and that people financing the film were reluctant to rely on her.
A call and e-mail to Lohan's rep were not immediately returned.
The movie, described as a comedic modern-day fairy tale that centers on a mystery involving the eccentric inhabitants of a remote island, stars Woody Harrelson, Jason Lee, Giovanni Ribisi, Kieran Culkin, Anjelica Huston, Eddie Izzard, Alanis Morissette and Dave Matthews.
On Thursday, Lohan's estranged father, Michael, called Los Angeles County authorities to visit her apartment to check on the welfare of her younger sister, Ali. The next day, a report surfaced that the actress was named a suspect in the theft of a $35,000 Rolex watch. Lohan's lawyer said the allegation was "completely untrue."