Ubisoft has confirmed that a sequel to Watch Dogs is currently in development and will release sometime before April 2017.
This was revealed via Ubisoft's financial report for next year, which runs between April 2016 and March 2017. Along with the Watch Dogs sequel, Ubisoft will also release For Honor, South Park: The Fractured But Whole, Tom Clancy's Ghost Recon: Wildlands and "a new high-potential AAA brand with strong digital live services" during this time period.
With the Assassin's Creed franchise taking a break this year, Watch Dogs 2 will most likely be taking its place. We will have to wait for an official announcement to know more details about the game.