Yeah, it will be set in San Andreas, in Los Santos, to be more specific. If you watch the trailer, you can recognize some of the locations from Los Santos...starting with the beach and the Vinewood sign on the hill.
I've seen that video 10 times I think. It's gonna be in Los Santos already. And if you look carefully, you can see that big mountain from San Andreas, I can't remember the name exactly, it was somewhere in the lower-left part of the map.