Speaking during a BAFTA lecture in London yesterday, Peter Molyneux announced that Fable 3 will make use of Microsoft's Project Natal.
“Fable 3 will have Natal support. Is that an announcement? #molyneux”
This "announcement" comes from a Tweet by a game industry analyst, Nicholas Lovell. While it may not be an official announcement by Molyneux or Lionhead Studios, the information doesn't come as a surprise to anybody. It's long been speculated that Fable 3 would incorporate some use of the motion controls.