Latino Review is reporting that the Govenator aka Ah-nuld will appear in Avatar 2 as a villainous general. Latino Review is usually right on the money, but they have been known to be incorrect every once in a while.
Part of this rumor sounds like something that complete fanboy dream with no actual substance to it. Schwarzenegger is trying really hard to re-cement himself as a major bankable star. He’s starring in action movies about old guys left and right. But they all look really bad. They all seem to be him attempting to relive the glory days. Having Schwarzenegger re-team with Cameron would be wonderful from a film fan’s point of view. But the likelihood of it seems a bit distant.
On the other hand, Cameron does like to reuse actors. Sigourney Weaver was in Avatar and Michael Biehn was originally set to appear. The idea of Cameron and Schwarzenegger re-teaming isn’t unimaginable. If this rumor is true then it would be a massive boon for Schwarzenegger’s career.