The 'That's My Goal' singer is said to have landed a deal to appear in the ITV competition's eighth series in 2013.
"Shayne has natural rhythm and is confident he'll really get into skating," a source told BANG Showbiz. "But he's most concerned about pulling off the pink sequinned spandex look".
Ward won the second series of The X Factor in 2005 under the guidance of Louis Walsh.
His self-titled debut album topped the UK chart, and its follow-up Breathless reached number two in 2007, yet Ward recently complained to The X Factor that he is "being erased slowly from their history".
Ward's fellow X Factor 2005 alum Chico finished third in last year's edition of Dancing on Ice.
Other celebrities rumoured for the upcoming series include Pamela Anderson, TOWIE's Lauren Goodger and Olympian Beth Tweddle.
Ex-Dancing on Ice judge Jason Gardiner is also believed to be rejoining the panel, which currently consists of Louie Spence, Katarina Witt and Robin Cousins.