"We are not talking any further about Lindsay playing Victoria," says producer Marc Fiore. "She is no longer being considered. The talks have stopped. We are going to meet with other people [for the role]."
Lohan was in discussions to play Victoria Gotti, daughter of late mob leader John Gotti, Sr., who will be played by John Travolta, who already voiced his support for Lohan, saying, "I always thought she was gorgeous and talented."
Victoria Gotti, 48, and her sons starred in their own A&E reality show, "Growing Up Gotti," between 2004 and 2005. Victoria Gotti lives in Long Island, New York, where Lohan's mother Dina resides.
Lohan appeared at a recent press conference for the film and said that she was very excited to be part of the project.
"I like that Victoria, she's very strong woman and I really appreciate and respect that," Lohan told reporters. "She's good friends with my mom and I met Mr. Gotti when I was younger too, when I was 3, which is really funny. It's a Long Island family, it's just like mine. I've never portrayed someone that I know in a film. This would be the first, which is very exciting."
Over the past few years, Lohan, who rose to fame with movies such as "Mean Girls" in 2004, has become more known for her off-screen antics, including a 2007 conviction for drunk driving and cocaine possession. She has been to jail several times and has also undergone numerous stints in rehab for alcohol and drug abuse.
"I think she's incredible," Victoria Gotti said about Lohan, according to People magazine. "I think she's a great actress. I think she can do ... any role, really. She had a little bit of a bumpy road recently. I think she's doing great. I think she's going to continue to do great and she's got a lot of people rooting for her."
Fiore did not offer any explanation for why Lohan didn't get the role, only saying, "She a wonderful person... Her legal case has nothing to do with it. We just couldn't reach terms."
The project is also in need of a director after Nick Cassavetes was forced to drop out due to scheduling conflicts. John Gotti, Sr. was also known as "The Dapper Don" and headed the Gambino crime family. He died in prison in 2002 and his 47-year-old son, John Gotti, Jr., later sold the film rights to producer Marc Fiore.
Others set to star in "Gotti: Three Generations," which is set for release in late 2012, are Travolta's 11-year-old daughter Ella Bleu and Joe Pesci, who will play John Gotti's right-hand man, Angelo Ruggiero.
Meanwhile, Lohan is awaiting an April 22 preliminary hearing on another case - the alleged theft of a $2,500 necklace from a jewelry store. Lohan recently rejected plea offers and maintains she is innocent.
During the hearing, prosecutors are expected to present evidence against her and determine if there is enough to warrant a trial. Also, a judge is set to determine if she violated her probation. If it is decided she had, she could return to jail.
UPDATE at 5 p.m.: Lindsay Lohan has been cast in "Gotti: Three Generations" officially and is confirmed to play Kim Gotti, wife of John Gotti, Jr. and daughter-in-law of John Gotti, Sr., Fiore Films said in a statement to OnTheRedCarpet.com.