The ICL on Monday announced Lara as its first big signing, two months after his name was initially linked with the rebel venture.
Warne's manager James Erskine said he had been in talks with ICL officials including board member Tony Greig and the world's highest Test wicket-taker is ready to join the bandwagon if his conditions are met.
The Australian reported that Warne had asked for a US$ 2m pay package for his assiciation with the ICL. The newspaper also claimed Lara's pay package would be US$ 5,00,000-a-year.
''They haven't offered what we have asked for, so negotiations are proceeding,'' Erskine, Warne's manager, told the newspaper.
''Provided the terms and conditions are right, Shane Warne will play, but it's a long way off before we get the contract signed,'' he said.
Another Aussie great, Glenn McGrath, who retired after the World Cup in the West Indies, was also in negotiations.
McGrath's manager, Warren Craig, said he had met with ICL officials some time ago and although there had been few developments since then, this week's events were likely to speed up the process.
''We certainly haven't ruled it out. Now Lara has signed, things might start to hot up a bit. Things could start to move over the next week or so,'' Craig said.
However, Craig said the ICL had given no indication what salary it would offer to lure McGrath out of retirement.
The league wants to run its first Twenty20 tournament this October and November with six teams, each of which would ideally feature four international players and two Indian stars, with the rest made up of younger Indian players.