BioWare has confirmed that existance of  Dragon Age III on the BioWare Blog today.

The next installment in the Dragon Age franchise has been in the works for the last 2 years and will feature a new game engine that uses Frostbite 2 from Dice as a foundation. Mark Darrah of BioWare says they plan on being as open as they can until the game is ready to be shown to the public but can not share details at the moment.

Here are details they can confirm right now:

• The next game will be called Dragon Age III: Inquisition.
• We won’t be talking about the story of the game today. Though you can make some guesses from the title.
• This game is being made by a lot of the same team that has been working on Dragon Age since Dragon Age: Origins. It’s composed of both experienced BioWare veterans and talented new developers.
• We are working on a new engine which we believe will allow us to deliver a more expansive world, better visuals, more reactivity to player choices, and more customization. At PAX East, we talked about armor and followers… Yeah, that kind of customization. We’ve started with Frostbite 2 from DICE as a foundation to accomplish this.

Source: BioWare Blog