Final Fantasy Versus XIII has been cancelled, at least according to sources who have spoken with Kotaku. They report that higher-ups at Square Enix have officially canned the elusive XIII spin-off, but will not make an official announcement in case negative fan reaction and years spent on a game that will never see the light of day has an impact on their stock prices. After six years of waiting and only the occasional vague confirmation of the games' continued development, I don't suppose this is a huge surprise to anybody.
It might not all be negative. A different source says that the game has been folded into the next numbers title, Final Fantasy XV, although whether that means assets and code or whether that means staff, they couldn't say. It seems unlikely that they've just changed the name to make it a full member of the franchise, especially if the rumours posted yesterday turn out to be true. Although it's difficult to know just how far along development was, music from the game was made available as DLC for Theatrhythm.
I'd say watch this space, the information will no doubt find its way out eventually, but Square Enix are apparently really trying to keep a lid on things here, so it might be quite a while until we discover just what happened concerning Final Fantasy Versus XIII.