Shuhei Yoshida, Sony worldwide studios head, has verified this in a recent talk with Polygon.
"It exists. The team is working hard on it." He also said he was "heartbroken when some article came out on some major site saying it was canceled."
The game has been in the works for seven years, and was announced five years ago. If it was be cancelled, this would be revealed by the studio for sure, Yosihda claimed, since it is such a highly anticipated game.
This news follows similar reports made earlier in the week, so it's safe to say that the game is coming. When? That's a different matter entirely...