It's in Limbo at the moment.
Bungie studios and Microsoft was basically asking for a budget of Star Wars-esque sizes, and the partnership between Universal Studios and 20th century Fox balked at it, and abruptly backed out. Microsoft tried securing fundings from other studios, including Warner Bros. and Paramount, but for now, it remains suspended indefinitly until it can secure funding.
it is thought that it is because it is projected way over budget, already at a herculean 135 million. Peter Jackson is optimistic, hoping the studios will reconsider when they see the Halo hype first hand at the release of Halo 3.