The rumor has been also printed in several print publications, but supposedly it's on again off again. I asked someone at Volvo about it and he chose not to comment. Note, he chose not to comment, he didn't choose to deny it. Make of it what you will.
If it gets made, it'll probably be put in the XC90, S80 and rumored V90 I've heard might be at the Detroit Auto Show in January.