A Premier League managers' arbitration tribunal ruled in favour of Conte, report The Times, meaning the London club will be forced to pay him £9 million ($17m) in compensation.
The Italian manager was sacked by Chelsea last July with a year left on his contract, and his legal team argued he was entitled to a $17 million payout.
Chelsea, though, say his behaviour that season was in breach of his contract, after falling out with the likes of star striker Diego Costa.
The case could end up in the English High Court if Chelsea refuse to accept the ruling.
Chelsea's Russian owner Roman Abramovich has spent over a staggering $128 million on compensation to fired coaches since taking over the club.
49-year-old Conte was replaced by compatriot and ex-Napoli coach Maurizio Sarri, whose own future at Stamford Bridge is currently in doubt.
Conte, meanwhile, has been strongly tipped to take over at Inter Milan - fierce rivals of his former side Juventus - after a year out of football.