The rumor has floated around on various sites and he confirmed it in today's Ross Report in his usual babbling way.
I think Ross has had to go along with Lawler since at least 2002. He's been a parody of himself and I think you can blame a lot of the lower card guys not getting over on the fact that the announcers just ignore them to talk about Triple H or Austin during their matches. Normally I would see this as a positive but Lawler's probably still going to be around and the fact that the WWF doesn't have one good announcer under contract, not counting Cole and Tazz, has me worried. I think they'll manage to stick someone in there that'll have me wishing Ross was back by the end of their first show.
EDIT: Ouch I messed up on my spelling.