The action movie, which stars Tom Cruise, was scheduled for a three-week shoot in Venice, but that has now been stopped after more than 200 people tested positive for the virus in Italy.

It is the largest number of confirmed cases of the disease outside Asia.

In a statement, Paramount Pictures said it was following the advice of the Venetian government and using an "abundance of caution" in halting production.

"During this hiatus we want to be mindful of the concerns of the crew and are allowing them to return home until production starts. We will continue to monitor this situation, and work alongside health and government officials as it evolves," the studio said.

It is understood Hollywood star Cruise, 57, was not in Italy for filming.

The film industry is facing the prospect of losing hundreds of millions of dollars as it moves to deal with the strain of coronavirus, also known as Covid-19.

Paramount has already postponed the Chinese release of its family adventure Sonic The Hedgehog while cinemas across the country - the world's second largest box office market - have been closed.

The Chinese premiere for No Time To Die, the latest James Bond film, has also been cancelled.

And Disney faces a headache over its Mulan remake, which is set for release next month.

If cinemas in China are still closed, Mulan's box office take could suffer a significant blow.

Australian Associated Press