The actor is planning to play the superhero in a children's film to be directed by his brother Sohail Khan.
A source told The Times of India: "Only creating the tiger and its action was going to cost over 40 crore, which is higher than the regular production budget of a Salman film, minus his fee.
"So one can imagine the budget required for such a film. Hence, until Salman is assured of the feasibility of such a project, Sohail can't go ahead with it."
In August, it was reported that Khan had requested that the character becomes an romantic hero rather than an action one.
The director announced plans in 2011 to create Sher Khan's tiger companion in CGI after PETA objected to using a live animal.