The talented right-hand batsman has been approached by an unidentified IPL franchise who are prepared to sign him 'at any price'.
Pietersen may be given the go ahead by the England and Wales Cricket Board (ECB) although it had earlier stated that it would not allow centrally contracted players to play in the BCCI-backed T20 competition.
The ECB is hoping to set up their own Twenty20 league with the help of Texan billionaire Allen Stanford, in an attempt to keep England players out of the IPL's clutches.
However, the mega-lucrative IPL offer to KP has forced them to relieve the attacking batsman.
Team India's one-day captain Mahendra Singh Dhoni is currently the highest paid player in the IPL with a contract worth $1.5 million.