Warne, who captained the Royals to success in the inaugural IPL tournament in 2008, said he hoped the Board of Control for Cricket in India (BCCI), who own the cash-rich Twenty20 event, would "come to their senses".
The BCCI announced Sunday it had decided to terminate the franchise agreements with Punjab and Rajasthan "based on legal opinions" it had obtained and also issued notices to the new Kochi franchise to resolve ownership disputes.
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The BCCI did not specify the alleged breaches.
Warne, who was returning home from England on Monday, tweeted: "Thank you for all your messages of support, still shocked at IPL news re the Royals, what are other owners saying? Hope to know more asap."
The leg-spin wizard added: "What now for the youngsters?"
He said he hoped the BCCI would reconsider.
"The Royals gave young unknown Indian players a chance and I as captain backed them, and our coaching staff supported them... we were a team.
"Three seasons ago Royals won the first-ever IPL, underdogs come good, what a story, it helped give credibility to the competition.
"Now look."
Kings XI Punjab were bought for 76 million dollars in 2008 by a consortium of businessmen, while Rajasthan Royals were snapped up for 67 million dollars by businessmen, among them Australian media mogul Lachlan Murdoch.
Apart from Warne, fellow Australians Shane Watson and Shaun Tait, South African Graeme Smith and Pakistan's Kamran Akmal and Younis Khan have played for the Royals, while Australian paceman Brett Lee, Sri Lankans Mahela Jayawardene and Kumar Sangakkara played for the Kings.
