Lara, in charge of the team for an unprecented third time, threatened to quit after he claimed there was a month delay in informing him that he had been made a member of the West Indies selection committee.
The 37-year-old batting superstar had been at loggerheads with the West Indies board (WICB) over selection policy and believed he was rebuffed in his efforts to get the players he wanted in the team.
But the WICB said Saturday they will form a committee to investigate Lara's comments.
"The Board considered at length the recent statements and actions of Brian Lara during and after the conclusion of the fourth test match against India at Sabina Park," said a statement.
"It was agreed to appoint a committee headed by the President of the WICB, together with Sir Alister McIntyre, Clive Lloyd and Gregory Shillingford to investigate all matters relating to Mr. Lara's statements and to take such action as they may consider appropriate after these matters are discussed with him.
"Mr. Lara is currently away from the Caribbean, but it is expected that the committee will meet with him within the next two weeks."
After India had won the last Test by 49 runs inside three days at Sabina park two weeks ago, Lara said he might have to reconsider his position as captain.
"I got an endorsement letter (from the West Indies Cricket Board) a couple days ago saying that I was a selector since May 28," he told reporters at the post match news conference on July 3.
"I'll revisit my decision to captain the West Indies team."
Lara said his reputation was at stake in light of his calls for certain players to be selected.
"I was never given the team that I wanted," he insisted.
Meanwhile, the WICB board said Saturday that former international opener Gordon Greenidge will be the new chairman of the selection panel.
Greenidge takes over from Joey Carew.
The WICB also decided to offer retainer contracts to Lara, Shivnarine Chanderpaul, Ramnaresh Sarwan, Chris Gayle, Corey Collymore, Fidel Edwards and Denesh Ramdin.
However, Dwayne Bravo missed out after the WICB said it would be inappropriate to offer him a retainer contract as the player has a personal endorsement contract with a rival backer to the team's main sponsor Digicel.