Pegg was spotted on the 'Star Wars' set in Abu Dhabi last month, reported Digital Spy.
Asked about the rumours, Pegg said, "Well, JJ uses me in different roles, and we're good friends. I feel like my face in Star Wars would pop people out of the movie. Look, I love Star Wars, and I don't want people to watch and go, 'Oh, there's Simon Pegg's face'.
"The film is cleverly cast with these amazing, unknown actors. Of course I visited the set. It's amazing, and I love Star Wars. I want to see everything happening.
'Star Wars: Episode VII' is currently filming at Pinewood Studios.
The cast includes series veterans Harrison Ford, Mark Hamill, Carrie Fisher, Anthony Daniels, Peter Mayhew and Kenny Baker, who will all reprise their roles from the original trilogy.
John Boyega, Daisy Ridley, Adam Driver, Oscar Isaac, Andy Serkis, Domhnall Gleeson, Lupita Nyong'o, Gwendoline Christie and Max von Sydow are newcomers to the sci-fi saga.
'Star Wars Episode VII' is still scheduled to be released in cinemas on December 18, 2015.
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