I Am Legend 2 is still happening. After being confirmed last year and subsequently put on hold following the entire fiasco surrounding Will Smith, we're finally getting an update and it's a good one.
According to the film's producer and co-writer, Akiva Goldsman, the I Am Legend sequel will make the alternate ending canon.
Goldsman explained the rationale behind the decision to Deadline, saying: We trace back to the original [Richard] Matheson book, and the alternate ending as opposed to the released ending in the original film. What Matheson was talking about was that man's time on the planet as the dominant species had come to an end. That's a really interesting thing we're going to get to explore. There will be a little more fidelity to the original text. Goldsman later added in the same interview that I Am Legend 2 will "start a few decades later than the first", before citing his obsession with The Last of Us, which we can only presume has served as an inspiration for the film. Also, it appears New York will continue to serve as the setting for I Am Legend 2.