
Mancini said part of the reasons Inter Milan cited for the dismissal "gravely damaged my honour and reputation."
Inter had alluded to reports of alleged contacts with a group of drug dealers in explaining the dismissal.
The club said on its website it dismissed Mancini for declaring his intent to leave the club after being eliminated from the Champions League in March and for "the facts recently emerged from journalistic reports."
In some telephone conversations tapped by police and published by Italian newspapers in early May, Mancini and some Inter players were heard talking with people who were later arrested on drug charges.
Although no penal charges emerged against the coach, he said he sued several media outlets who published the content of the telephone calls and the police offices who leaked them.
Mancini said he "realised that the (club's) decision is based on events that gravely damaged my honour and reputation" and asked his lawyer "to safeguard my image ... stigmatizing the behaviour of the employer (Inter) as it tried to use false (events) and illicit (ways)."
The coach's move appears to be the first in a controversy with the club, who may have to pay him 24 million euros (37 million dollars) to honour a contract expiring in 2012.
The club appears close to sign Portuguese coach Jose Mourinho to replace Mancini, who reportedly rejected an offer of 5 million euros to settle his departure.
DPA