THQ has confirmed that its signed over the rights for ex-project Devil's Third to developer Valhalla Game Studios. 

"THQ confirms that the company will not be publishing Devil's Third," said a THQ spokesperson. "All of the game's IP rights have been returned to Itagaki-san and the Valhalla team."

Created by Ninja Gaiden mastermind Tomonobu Itagaki, Devil's Third was part of a crop of original IPs designed by well-known gaming developers and personalities commissioned by the publisher, including the Assassin's Creed series' original creative lead Patrice Desilet and Left 4 Dead developer Turtle Rock.

In production since 2009, Devil's Third likely became a problematic project for the troubled publisher after the company that created the game's design engine went out of business.

THQ said earlier this year that the game had been put on "indefinite hold", and later admitted they no longer planned to publish the game, because they didn't expect to make a profit on it.

Itagaki had already announced that THQ planned to return the rights to the developer in a recent interview with Famitsu.

"They didn't want to part with this IP," said Itagaki. "But we all have to see into the future and at last they did, for us."

Itagaki went on to say that, though the team was upset by the situation, they didn't blame THQ:

"We were anguished and they were really kind to us. Mr. Danny Bilson was searching for a way to work together until the very end. I do appreciate him and THQ managers that signed the transfer contract."

There is currently no release timetable for Devil's Third.

[Via Eurogamer]