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The New Moon star will portray a villain in the sequel to the 1982 film, says JoBlo.com.
Sheen previously suggested that he was taking on the role via his Twitter account, saying that the character is "in fact not a person at all", while it is being reported that his computer-generated role will be out to stop Jeff Bridges's part in the update.
The actor is also said to be in talks to resurrect 007 villain Ernst Stavro Blofeld for the next James Bond outing.
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