Ign confirmed the details as well:
UPDATE: The official press release has just landed on our desk, complete with further details on the title. It follows on from Sonic and the Secrtet Rings as the second part of the Wii exclusive storybook series, and is being developed by Sonic Team in Japan. Transporting Sonic back to an Arthurian medieval world, it arms Sonic with a sword to tackle his foes. It's currently scheduled for release in Spring 2009, so keep a look out for more details here as they emerge.
While continuing the secret ring storyline is great, if the sword requires stop-and-hack it would cut the pace and the whole speed factor. Unleashed will face the same issues. Why they couldn't stick with Secret Rings controls by fixing only the backwards walk?
"You won't find Adobe here in Nairobi"
