Diablo III has been estimated to have begun pre-production 5 years before the official announcement of the game at Blizzcon 2008. After the pre-production stage, an estimated 60 people have been working on the game. As per Blizzard's style of development, many original ideas for Diablo III were explored before the development team finally decided on a look and style for the game.
As of February 2009, many hope that the game will be released in 2010, but there has been no official indication of any release date set from Blizzard.
Judging from videos released, it seems that Blizzard has built the foundations for the game's engine, and currently fully engaged in making content for the game, such as completing all of the acts and the remaining 2 undisclosed classes.