It's most likely the 'release' or 'throwout' bearing.
$30 part buried right next to your clutch. You'll want a second opinion before you tear into it. Take it to a local indie and ask them what they think.
The fix is basically a clutch job. No sense in just doing the throwout bearing if you open it up. Clutch is right there; parts are cheap relative to the labor.
Not an impossible job for a good DIY with an assistant.
Jeff
90 535i, tranny that's been in and out several times now
Bellevue WA
90 535iM - not much stock remains. 3.7 liters, ported head, cammed, 3.73 diffy, M5 brakes, MAFed, yadda yadda yadda
86 Porsche 951 - Track Toy