With Ninja Theory with their concentration on the next Devil May Cry game to be featured at E3, this is indeed a rumor.  However the rumor is just that Heavinly Sword 2 is in development and that more on the game will be revealed at E3.  Apparently the game will take place 10 years after the first one and you will start by hand to hand combat eventually earning the almighty sword.  Interactive environments as well as taking place in a sand box open world type game.

Thanks to VG24g7, via The Silent Chief