The following statement showed up on his website today:

Slowly but surely, Peter Jackson has managed to secure the return of the majority of the major stars from "The Lord of the Rings" franchise for his soon to be shooting prequel, based on J.R.R. Tolkien’s The Hobbit.

Sir. Christopher Lee had been in talks to reprise his role as the wizard Saruman and it now looks certain, providing that he is in good health, that he will be appearing in the movie.