The 57-year-old brunette told E! News that the star is not suffering from any memory-related illness or dementia and has no current plans to retire.
Another source close to Jack said he is actively reading scripts at the moment and is looking forward to his next role.
Nicholson's illustrious career has included three Oscar wins, two for Best Actor in One Flew Over the Cuckoo's Nest and As Good as It Gets and a Best Supporting Actor statuette for his turn in the 1983 film Terms of Endearment.
Nicholson has previously singled out his role as The Joker in Tim Burton's 1989 version of Batman with Michael Keaton in the lead role as a personal favourite.
He said: "I was particularly proud of my performance as The Joker. I considered it a piece of pop art."
Nicholson is also philosophical about his fame, saying he believes he has "done okay".
In an interview published in Britain's Esquire magazine in June, he said: "I take responsibility for my successes as well as my failures. But when I look at my professional mistakes, I'm always left with the feeling that maybe I should have done more. These are my private musings.
"I'm such a perfectionist. I always feel over-praised, or whatever. In the abstract, I know I'm a good person, a good professional. But it's nice to be noticed a little bit, ain't it?"
The last film Nicholson appeared in was 2010s How Do You Know, which also starred Reese Witherspoon, Paul Rudd and Owen Wilson.
- Bang! Showbiz