Shyne will not be released from jail until 2009

Shyne, real name Jamal Barrow, was sentenced to 10 years in prison for his role in a 1999 nightclub shooting that involved music mogul Sean Combs.

The rapper is expected to sign a deal for as much as $3m (�1.68m). The album would be produced using material Shyne recorded before going to prison.

It was unclear whether the star would record new material while behind bars.

Shyne would be the first artists to sign to the label since respected music figure Antonio 'LA' Reid took over Island Def Jam in February.

Club shooting

The rapper was sentenced in 2001 following the 1999 incident, in which three people were wounded during a shoot-out in a New York club.

The fight happened after a patron allegedly insulted Combs' girlfriend at the time, Jennifer Lopez.

Shyne was convicted of gun possession and assault for using a firearm in the crowded club, and of hitting at least one person.

He is not expected to be released from prison - in Dannemora, New York - until 2009.

The proposed record contract includes a stipulation that Shyne's albums would have to be released on an imprint of Island Def Jam called Gangland Records.