James Franco's involvement in Alien: Covenant had been rumoured for a little while. However, up until now, it was never confirmed.
In this new interview though, he certainly seems to have confirmed his involvement with the film in this interview with We Got This Covered. While he plays very coy with his part in it, he doesn't avoid the quesiton of being in the film.
The current rumour is that Franco will have a small 'but important' role in the film. The thinking is he will play captain of the spaceship Covenant, Branson. This isn't confirmed though, so we will have to see how this comes together.