The helmer explained that he is keen to avoid the problems encountered by the Matrix trilogy in its second instalment, and admitted that the sequels are proving a challenge to write.
"It's a little bit of a daunting writing task because it's two scripts and they've both gotta be done at the same time," Cameron told the Los Angeles Times, adding that the two films will tell separate stories despite being filmed back to back.
"I'm writing it as separate stories that have an overall arc inclusive of the first film. I don't want to suffer from the Matrix 2 problem, where it just ends, like, what the hell? It's gotta end.
"There's gotta be a sense of conclusion, but also a sense that the journey will continue, and that's a fine line."
It was reported in July that the first sequel is unlikely to be released before 2015.
Producer Jon Landau recently debunked a report that three sequels would be shot back to back, confirming that only two are currently in development. Cameron has subsequently, however, suggested that he has an additional prequel in mind.
Sam Worthington, Zoe Saldana and Sigourney Weaver will all reprise their roles in the sequels.
Watch Worthington discuss Avatar 2 with Digital Spy below: