From MTV:

"There's meant to be a 'Magneto' script floating around," McKellen told Empire Online. "[But] I've not read it, so I suspect it wouldn't involve me."

The acclaimed "X-Men" and "Lord of the Rings" actor acknowledged the already well-publicized idea that "Magneto" would focus on the mankind-hating mutant as a youth, meaning that McKellen's involvement in the project is probably unnecessary.

"I think it would be about the younger Magneto, and the most I could hope for would be to top and tail that," said the actor. "They can't have someone whose face is as lined as mine any longer!"

Read the whole interview here.

This isn't that much of a surprise, but I do want to see McKellen as Magento again, because that dude can act!  After the de-aging techniques used in X-Men: Last Stand and X-Men Origins: Wolverine, I would have assumed that we would at least get a framing story with Ian McKellen recounting how he went from a friend and comrade of Dr. Charles Xavier, to his sworn enemy.

Again, Magneto is in very early stages, so who knows how this is really going to go down.