Rings 'American producer Barrie M Osborne confirmed Sanders will be credited as producer for the first film but the others will "depend on his contract with New Line".
He said in the interests of continuty, Sanders will have an ongoing involvement with Rings but it won't be day-to-day.
Osborne, who's independent of New Line, said Sanders isn't being replaced because having set up The Lord of the Rings, "he's fufilled his role ... He got the ball rolling-to bring someone else in now would be counterproductive."
Onfilm couldn't contact Sanders, but he has publicly said it was his choice to go and doesn't want to discuss it further.
Sanders has produced eight miniseries and features, executive-produced three, worked on 25 major productions, and was the Rings producer for three years including two years on the job before the arrival of Osborne.
Asked if the New Zealander was under pressure from New Line to leave, Osborne said, "Not really," but pointed out there were enormous pressures in shooting three movies back-to-back.
The executive producer of The Maxtrix said he'd enjoyed working with Sanders. "He's done a terrific job and I'm sad lo see him go because it puts more pressure on me frankly."
Osborne said he was "a little surprised" about Sanders leaving a fifth of the way through shooting "but there was some discussion about it". As to whether New Line tried to dissuade him from going, Osborne said that was a question for the studio.
But he did dismiss suggestions it was tied into reported problems on the production. "I don't think there is any dissension with local crews. We have ongoing discussions about issues because we don't have a collective bargaining agreement and sometimes ambiguities have to be settled through meetings."
Osborne said Filming has gone smoothly over the first three months and everything's on schedule for the next 12. "Peter [Jackson] has been very disciplined about time.
"We got hit with some bad weather in the South Island and lost a few days but we're pretty much on schedule."
Meanwhile, New Line has served a trespass notice against Rings fan Erica Challis, who runs the theonering.net website from Auckland. She has been banned from the Rings set for two years because New Line doesn't want unauthorised photographs being distributed.
Osborne said the action was necessary because she'd publicly stated she would snoop around the set. "We have a closed set and people are not welcome to come and take photographs." However, he said he'd be happy to come to an arrangement with her over publicity materials because "she is an avid fan".