Lucas Museum officials are no longer considering Chicago for the attraction, according to a Friday announcement.
"The Lucas Museum of Narrative Art announced today that in light of extensive delays caused by Friends of the Parks, Chicago will no longer be considered a potential site for the museum," reads a news release issued by Lucas Museum officials. "The board of directors and executive leadership of the museum confirmed that California will be its future home."
A Friends of the Parks lawsuit had stalled plans for the Lucas Museum in Chicago since November 2014.
As the court battle raged on, George Lucas and his wife Mellody Hobson warned last month they were "seriously pursuing locations outside of Chicago."
They have now officially pulled the plug on building the museum in Chicago.
"No one benefits from continuing their seemingly unending litigation to protect a parking lot," Lucas said in a statement. "The actions initiated by Friends of Parks and their recent attempts to extract concessions from the city have effectively overridden approvals received from numerous democratically elected bodies of government."
Here is Chicago Mayor Rahm Emanuel's full statement in response to the news:
Two years ago to the day, George Lucas and Mellody Hobson announced that they had chosen Chicago as the site of their incredible legacy investment. The opportunity for a City to gain a brand new museum is rare, and this particular opportunity - a gift worth approximately $1.5 billion - would have been the largest philanthropic contribution in Chicago's history.
Unfortunately, time has run out and the moment we've consistently warned about has arrived - Chicago's loss will be another city's gain. This missed opportunity has not only cost us what will be a world-class cultural institution, it has cost thousands of jobs for Chicago workers, millions of dollars in economic investment and countless educational opportunities for Chicago's youth.
Despite widespread support of the project from Chicago's cultural, business, labor, faith and community leaders and the public, a legal challenge filed by Friends of the Parks threatened to derail this once-in-a-generation opportunity.
We tried to find common ground to resolve the lawsuit - the sole barrier preventing the start of the museum's construction. But despite our best efforts to negotiate a common solution that would keep this tremendous cultural and economic asset in Chicago, Friends of the Parks chose to instead negotiate with themselves while Lucas negotiated with cities on the West Coast.
UPDATE (3:12 p.m.): Friends of the Parks Executive Director Juanita Irizarry and Board Chair Lauren Moltz have issued a joint statement: "It is unfortunate that the Lucas Museum has made the decision to leave Chicago rather than locate the museum on one of several alternative sites that is not on Chicago's lakefront. That would have been the true win-win."