Ratner stepped down as Oscar producer on Tuesday (November 8) in the face of an industry firestorm over his use of a gay slur.

During a question-and-answer session at a screening of his new comedy "Tower Heist" last week, Ratner was asked about rehearsals ahead of a film shoot, and he replied "rehearsing is for fags."

He later apologized publicly, but the damage was done as gay rights groups and some members of the Academy of Motion Pictures Arts and Sciences, which puts on the Oscars, took issue with his use of the word "fags."

Murphy released a statement saying: "First and foremost I want to say that I completely understand and support each party's decision with regard to a change of producers for this year's Academy Awards ceremony. I was truly looking forward to being a part of the show that our production team and writers were just starting to develop, but I'm sure that the new production team and host will do an equally great job."

The Academy has yet to announce replaces for either Murphy or Ratner. The show will air on Sunday, February 26, 2012.