"There is a time to make a deal, time to sign a contract, agree on a contract or not agree on a contract," Shero told the Penguins website Saturday. "There is a point in the negotiation where you have to make a decision. Kris is going to have to make one and so am I.
"Both sides have to make some decisions. We'll go from there."
Letang has one season remaining on a contract with a salary-cap value of $3.5 million in 2013-14. Shero wants to sign him to a long-term contract, but the two sides have yet to agree on a deal. The Penguins reportedly offered an eight-year deal worth about $7 million per season but were turned down.
The scenario with Letang is much the same as the one Shero and the Penguins faced with center Jordan Staal at this time last year. Shero's answer was to trade Staal to the Carolina Hurricanes for center Brandon Sutter, a first-round draft pick and defense prospect Brian Dumoulin.
Shero said it's not certain the Penguins will trade Letang if a deal isn't reached in the next few days.
"That doesn't mean if we don't agree on a contract that he's getting traded," he said. "There's no guarantee. Maybe you need a little break to see where it takes you."
Other NHL teams have reached out to Shero regarding a potential deal, but he said he's not entertaining any offers at this time.
"I can't try to sign a guy and try to trade him at the same time. I'm going to try to sign him," Shero said. "I've had a couple teams inquire. They read the paper. They ask to keep them in mind. I haven't explored any of that. I don't think that's productive at this point. Our goal is to sign him."
Letang, 26, was a finalist for the Norris Trophy as the NHL's best defenseman after putting up five goals and 38 points in 35 games. Letang was the only defenseman in the NHL to average more than a point a game this season, but he missed 13 games with injuries.
"Kris Letang is one of the better defensemen in the League. He's a Norris Trophy candidate this year and he's 26 years old," Shero said. "It's trying to find the balance and the right hockey team, not only next year but moving forward. Kris is a tremendous player and his best days are ahead of him.
"He's worth waiting on and making the right decisions. There's a time to make a deal, sign a player. There's a time when it's apparent that you can't. That's not apparent to me right now. We'll continue to work on it and see where we go."