The Rocky actor contacted Deadline to deny reports to the contrary, claiming he has "no knowledge" of Cage signing up for the sequel.
Rumours of the Con Air star's involvement in Expendables 3 surfaced following reports in Spanish daily El Pais and a Stallone Facebook fan page.
It has since been confirmed that the quotes used by the Spanish publication were made by Stallone during a press junket for Expendables 2, in response to a question about who he would potentially like to see in a second sequel.
Harrison Ford and Wesley Snipes were among the other names mentioned, while Clint Eastwood has also been suggested in the past, along with Mickey Rourke, who appeared in the original Expendables.
The Expendables 3 is in the works, but a release date for the film is yet to be set.
Watch a trailer for The Expendables 2 below:
Photo gallery - 'The Expendables 2' UK premiere:
Copyright: PA Images Ian West/PA Wire