A representative for the 'Red Solo Cup' singer confirmed to Country Weekly that Keith was recently approached by American Idol bosses to become a judge.
"Toby was flattered but turned down the offer from American Idol," Keith's spokesperson commented.
A search is currently underway to fill open American Idol judging slots left by Steven Tyler and Jennifer Lopez, who both left the series this month.
Mariah Carey officially joined American Idol last week, earning a reported $17 million for the 12th season.
Brad Paisley was previously rumoured to be in the running for American Idol, with Nick Jonas and Pharrell Williams also apparently in talks.
American Idol returns to Fox in 2013, with open auditions currently under way across the US.
Watch Toby Keith's 'Red Solo Cup' music video below: