Stallone, who had previously indicated on social media that he would helm the sequel, made the announcement on social media.
"The character of Adonis Creed reflects this generation and its challenges. I believe it's important for the director to also be a part of this generation like I was in mine, to make the story as relatable as possible.
"We are extremely lucky to have the talented young filmmaker Steven Caple Jr step up and accept the role of director. I am confident that he and Michael B Jordan will hit it out of the park!" Stallone wrote on Instagram.
Caple, who made his feature film directorial debut on the 2016 Sundance entry "The Land", will direct from a script by Stallone and Luke Cage showrunner Cheo Hodari Coker.
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