I'm out of town.
'Città' — cit-TA. Stress on the final accented syllable. The accent is important — 'citta' without accent is wrong.
Use when you are literally not in the city where the plans were made. Simple, factual, and requires no further explanation.
'Fuori città' literally means 'outside the city'. It's a geographic statement that makes cancellation unavoidable. Unlike some excuses that can be questioned, being physically absent is unassailable.
Sono via questo weekend.
I'm away this weekend.
'Via' (away) is the simplest way to express being out of town
Sono in trasferta per lavoro.
I'm travelling for work.
'Trasferta' is the specific term for a business trip — very credible
Sono andato/a dai miei.
I've gone to my parents'.
Very Italian — returning to parents in another city is extremely common at weekends
Many Italians, particularly those living in big cities, return to their hometown regularly to visit family. 'Vado dai miei' (I'm going to my parents') is one of the most common weekend activities for young professionals.