Bosses at ITV have offered up the cash in a bid to convince the 40-year-old to replace Simon Cowell, 51.
Barlow's deal will see him become the talent show's top earner alongside Louis Walsh, 58.
A source told British newspaper The Sun: 'Gary is not exactly a D-list celebrity so hiring him comes with a cost.
'With Cheryl and Simon out of the picture there was some decent cash to hire big names.
'But it's not about the money for him - he is genuinely interested in bringing on new talent.'
Bosses are said to have moved the auditions to fit in around his Take That tour schedule.
N-Dubz singer Tulisa Contostavlos is rumoured to be signing a contract worth around £500,000 to also become a judge on the show.
A source added: 'This is a dream come true for Tulisa. This will catapult her to a household name.
'She is being talked about as the new Cheryl.'
Aussie star Dannii Minogue will not be returning to sit on the panel.