Cameron's blockbuster will go up against Bigelow's gritty war drama The Hurt Locker for the coveted prize at the upcoming ceremony in March (10), along with eight other films including Up In The Air, The Blind Side and Precious: Based On The Novel Push By Sapphire.
The moviemaker will also compete with his former spouse for the Best Director Oscar, but he's convinced Academy bosses will overlook Avatar because of his previous behaviour at the famous event.
Cameron is adamant Oscar bosses weren't impressed with his speech when he picked up the Best Director trophy for Titanic in 1998, in which he quoted one of the film's famous lines, telling the crowd, "I'm king of the world!"
He tells Empire magazine, "I always believe it's very unlikely that lightening will strike twice. I believe it's very unlikely that we will win because I made such a jacka** out of myself last time. Although there might be some curiosity about what I might do."
But Cameron hopes Bigelow's movie goes on to rule the ceremony instead.
He adds, "The Hurt Locker is a very, very strong picture. Of the contenders, it's definitely the strongest. Certainly it's Kathryn's moment. I would happily lose to her. I've already got one of those damn statues. I'd be p**sed off if somebody else won, but I wouldn't mind if she won."