Nintendo announced Legend of Zelda Skyward Sword at their E3 press briefing a few hours ago. Miyamoto himself demonstrated the game at the show with the Wii motion-plus controller which will be used during gameplay to control the sword & shield. Although the demonstration was hampered a bit due to some technical difficulties, Miyamoto assured that it was due to some some wireless interference and the game can be played at the Nintendo Booth without any difficulties. Nintendo has also released the first trailer for Legend of Zelda Skyword Sword which will be released in 2011.
Check out the Legend of Zelda Skyword Sword E3 2010 trailer below