STUTTGART (Reuters) - Germany's Porsche aims to cancel a deal that would have Canada's Magna build the Porsche Boxster model series under contract, a source familiar with the situation told Reuters.

The move follows Volkswagen's planned takeover of parts of insolvent contract carmaker Karmann. Volkswagen and Porsche are in the process of merging by 2011.

Porsche last year awarded Magna an eight-year contract to build Cayman and Boxster models from 2012.

(Reporting by Hendrik Sackmann, Writing by Michael Shields)