The 34-year-old has been informed his current deal with the club will not be renewed, says the Mirror.
The England international has been in fine form in recent weeks, scoring four times in his last five appearances for the Stamford Bridge side. His displays have prompted many to question why the club are releasing him.
However, Lampard will not be short of suitors when he does leave Stamford Bridge with a number of possibilities emerging in recent weeks.
Family ties could tempt Lampard to another West London club in the summer.
However, Rangers' position in the Premier League remains subject to debate with the club rooted to the foot of the table five points from safety.
Finances at Loftus Road would change dramatically with a drop into the Championship should Redknapp fail to save QPR.
The Chelsea midfielder is unlikely to want to drop a division in his final few seasons as a player.
LA Galaxy remain a favorite to sign Lampard when his contract ends.
The California club would view the 34-year-old as a high-profile name to bolster their ranks and public appeal after the departure of David Beckham.
Ex-Spurs striker Robbie Keane is part of the Galaxy squad and would be a familiar face for Lampard, who could be tempted into one final big pay day at the MLS club.
Manchester United manager Sir Alex Ferguson has never turned his nose up at an experienced player and Lampard would fit the profile well.
With Paul Scholes approaching the end of his playing career, Lampard could be the ideal squad replacement for the 38-year-old veteran and ideal candidate to help Tom Cleverly learn.
Ferguson has taken chances on proven older players in the transfer market before, notably Michael Owen in July 2009. It would be unwise to rule Ferguson out of the running.
West Ham United
Any approach for Lampard, though, would have to be handled with care. Many West Ham supporters believe Lampard used his father's sacking as assistant manager at Upton Park to engineer his way out of the club in an £11 million move to Stamford Bridge.
West Ham are secure in their Premier League status, but a move for Lampard would seem highly unlikely.
The Chinese top flight is trying to build its name as a leading football power and has the financial muscle to tempt high-profile players. Lampard would be another big statement from them.
It is doubtful, though, that Lampard would consider the move to the Far East. His current form proves he can still cut it at a decent level and China is still only in a development stage as a league.