Grey’s Anatomy’s Katherine Heigl has been tapped to star in 27 Dresses, a romantic comedy directed by Anne Fletcher (Step Up). Scripted by Aline Brosh McKenna (The Devil Wears Prada), the story is about a single woman (Heigl) who has been a bridesmaid 27 times. She is enlisted as bridesmaid again for her sister, who is is marrying the man she is madly in love with. Production is slated for May, after the actress finishes shooting Grey’s. Heigl chose the project after being courted for several films following the positive buzz on her upcoming movie Knocked Up, directed by Judd Apatow (The 40-Year-Old Virgin).

I didn’t know she smoked!  Anyone watch Grey’s last night?  I thought she looked like crap!  I don’t know what it is - I’m going to stick with I think it’s her hair color/style.  She just looked weird last night. 

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Actress Katherine Heigl is now speaking out about the latest Grey’s controversy in which sources incorrectly reported that she had stopped contract negotiations and was not returning for another season.

“I am embarrassed that this has become a public matter and disappointed that Touchstone felt it necessary to divulge private employment information,” Heigl said in a statement. “I had hoped I would be able to deal with this issue confidentially with my bosses. I dropped out of the renegotiation simply because I wanted to treat myself with the respect I was not getting from them. No matter how unhappy I am about their decision to respond to this publicly, I continue to be passionate about and committed to this character.”

Following previous reports to the contrary, ABC has issued a statement on Wednesday to Grey’s Anatomy fans, assuring them that Heigl was NOT leaving the show and that she was indeed being rewarded for all her hard work.

“Katherine is an integral part of Grey’s Anatomy and its success. Fortunately, we have a long-term contract to ensure she’ll be with the show for several years to come. In recognition of her tremendous talent and value to the show, we recently approached Katherine with an offer to raise her compensation significantly above the terms of her current contract. We were surprised to see this gesture reported negatively in the press, and want to reassure fans that she will continue as Izzie Stevens.”

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Earlier today People released a story regarding our beloved Izzie Stevens, which alleges that “Katherine Heigl has dropped out of contract talks with Grey’s Anatomy over salary” and that she is “disappointed that (producer) Touchstone doesn’t value her as much as her other costars, especially Sandra Oh and Isaiah Washington.”

Well, I am happy to report to you that Katherine Heigl is not leaving Grey’s Anatomy. At least, not anytime soon. I’ve just spoken with various sources connected to the show, and they all confirm to me that Katherine is under a six-year contract—so legally, she does not have the option of leaving the show.

So, what happened? Well, according to sources and an official release from ABC Television, the network offered to bump Heigl’s pay to a higher amount than her initial contract. However, according to one well-placed show insider, “Heigl’s representation felt it unfair that she was still not being offered the same compensation as some of the other supporting actors are making. And so, obviously, someone leaked the story to People.”

Meanwhile, ABC Television just responded by releasing the following statement:

“Katherine is an integral part of Grey’s Anatomy and its success. Fortunately, we have a long-term contract to ensure she’ll be with the show for several years to come. In recognition of her tremendous talent and value to the show, we recently approached Katherine with an offer to raise her compensation significantly above the terms of her current contract. We were surprised to see this gesture reported negatively in the press, and want to reassure fans that she will continue as Izzie Stevens.”

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Katherine Heigl has dropped out of contract talks with Grey’s Anatomy over salary, a well-placed source tells PEOPLE.

“Katie is disappointed and hurt that (producer) Touchstone doesn’t value her as much as her other costars, especially Sandra Oh and Isaiah Washington,” the source says.

Heigl plays Dr. Isobel “Izzie” Stevenson on the ABC hit medical drama.

A rep for ABC Touchstone TV had no comment.