Iceland has been involved with CLARIN for a number of years. Iceland became a member of the consortium of the CLARIN Preparatory Phase project in 2010, but without any funding. Since CLARIN ERIC was founded, Icelandic researchers have had numerous meetings with officials from the Ministry of Education, Science and Culture to advocate CLARIN membership. Despite not being member of CLARIN, Iceland participated in the Nordic CLARIN Network, which was active from 2014-2017, and Icelandic researchers took part in a number of meetings and workshops organized by the network. In June 2017, the Nordic CLARIN Network arranged a workshop at the University of Iceland to discuss the possibilities of Iceland joining CLARIN. The workshop was attended by representatives from five Icelandic institutions which possess language resource or make use of them in their work, and also representatives from the Ministry of Education, Science and Culture, and the Icelandic Centre for Research. Bente Maegaard, Vice Executive director of CLARIN, and the National Coordinators for Sweden and Finland presented CLARIN for the workshop participants.

In October 2016, the Minister of Education, Science and Culture appointed a special language technology steering group which commissioned three language technology experts to work out a detailed Project Plan for Icelandic language technology. The Project Plan was handed in to the Minister in June 2017, and in November that year, the new Government decided to implement the plan and fund it for the next five years. The Project Plan has a special chapter on CLARIN where the importance of Iceland joining CLARIN ERIC is emphasized. It is explained in detail how Iceland would benefit from membership, in gaining access to a great number of tools and resources, and to expertise in several matters. A great number of resources and tools will be developed within the Language Technology Program, and it is of utmost importance that they are described and stored according to established standards. The Project Plan points out that CLARIN could provide invaluable assistance in these matters.

Following the proposal made in the Project Plan, the Ministry of Education, Science and Culture decided to fund CLARIN ERIC membership. As it turned out, however, Icelandic law need to be changed if Iceland is to become a full member of CLARIN ERIC. Instead of waiting for these changes to go through, it was decided to apply for observership. Iceland's application for observership was approved by the CLARIN ERIC General Assembly on November 22, 2018. The Ministry has assigned The Árni Magnússon Institute for Icelandic Studies the role of representing Iceland in CLARIN ERIC and leading an Icelandic CLARIN consortium. Ásgerður Kjartansdóttir, Senior Adviser in the Department of Education and Science in the Ministry will represent Iceland in the General Assembly, and Eiríkur Rögnvaldsson, Professor Emeritus at the University of Iceland, has been appointed as National Coordinator for Iceland.