County teams are under pressure to cut their ties with the ICL, where Saqlain plays for the Lahore Badshahs.
The ICL is regarded by the Board of Control for Cricket in India (BCCI) as an unwelcome rival to its own Twenty20 event, the Indian Premier League, and it has done all it can to make boards around the world ostracise ICL players.
Kent, for example, have effectively been barred from the lucrative inaugural Champions League because of the ICL players in their ranks.
Earlier this month Lancashire released ICL-affiliated captain Stuart Law, the former Australia batsman.
Surrey have decided they will have no choice but to do likewise with Saqlain, who in his first spell at The Oval was a key member of the Brown Caps' turn of the century County Championship title-winning teams.
"We are not prepared to go into next season with an ICL player," Surrey chief executive Paul Sheldon told the BBC.
"Clubs are not being encouraged to be associated with ICL players and it's our policy not to be.
"We are talking to Saqlain about how we can come to some arrangement because he can't get out of his ICL contract."
India off-spinner Harbhajan Singh has been linked with a return to Surrey next season but the BCCI will not release him to a county that has any ICL players on its books.