'Princess Diaries 3' not moving forward at Disney

A new "Princess Diaries" movie is not happening in the near future despite rumours that said Walt Disney Pictures was moving forward with a sequel to "Princess Diaries 2: Royal Engagement".
"Princess Diaries" movies starred Anne Hathaway and Julie Andrews, reported Ace Showbiz.
The rumour was first reported by The Tracking Board. It said that Disney was currently working on the third installment of "Princess Diaries" movie series, but it might not include Hathaway.
It also said that Debra Chase of Martin Chase Productions returned to produce the newest picture. The rumour sparked after actress Heather Matarazzo, who portrayed Lilly Moscovitz in "Princess Diaries" series, tweeted that good news was on the way for fans of the franchise.

However, what Matarazzo hinted was definitely just a rumour as a source close to the project says that a conversation has occurred about a possible sequel, but there is no significant step done after all.
Sources close to Hathaway also confirm that the actress is not attached to any sequel at this time.
The first "Princess Diaries" movie which was released in 2001 centered on Mia Thermopolis (Hathaway) who had just found out that she's the heir apparent to the throne of small country named Genovia. With the help of her grandmother, Queen Clarisse Renaldi (Andrews), she was trained to become a real princess.

The second film in 2004 continued with the story about Mia who was being primed for an arranged marriage to an English suitor.