Compensation negotiations between the former Saints manager and executive chairman Nicola Cortese had reached an impasse since his controversial dismissal two months ago
The League Managers’ Association, who are representing Adkins, confirmed on Wednesday that the matter would be settled via tribunal after previously amicable negotiations fell through, although a hearing date has yet to be confirmed.
“There's been a breach of contract, hence why we've now passed it to the Premier League Managers Arbitration Tribunal,” a spokesman told Goal.com.
“It wouldn’t be appropriate to comment further on the matter.”
Adkins spent three years at St Marys, during which he guided Southampton to back-to-back promotions from League One to the top-flight.
But the fan favourite was unexpectedly replaced with former Espanyol manager Mauricio Pochettino in mid-January, with Southampton perched three points clear of the relegation places.
Adkins was placed on gardening leave following his dismissal but is now hotly in the running for the vacant managerial post at Reading after Brian McDermott’s sacking on Monday.
The current situation is not without precedent as Martin O’Neill followed a similar path after parting ways with Aston Villa, before agreeing on a settlement with chairman Randy Lerner in 2011.
More recently, Paul Lambert was set for a court date with former club Norwich City, but a settlement was agreed before the case went to a hearing.