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This rumor's been terminated.
A spokesperson for 20th Century Fox told The Hollywood Reporter that the 66-year-old actor and former Governor of California will not have a role in the sci-fi follow up that would reunite him with the filmmaker who famously launched his career with 1984's classic The Terminator.
Word that Schwarzenegger was being considered for Avatar 2 first appeared in Latino Review, which quoted sources as saying Ah-nuld would play a "bad guy human general."
While that actually sounds pretty badass, unfortunately it's false—at least for now.