Conte has reached a deal with the club owners that will see him pay € 7million (£ 6million) for the final year of his contract.
The former Chelsea boss guided Inter to their first Serie A title in 11 years but was embroiled in a dispute with club owners after proposing a downsizing of his squad.
Inter chairman Steven Zhang has reportedly asked Conte to cut his payroll by 15-20% and potentially sell players worth up to £ 70million this summer.
Zhang arrived at Inter headquarters to continue discussions with senior officials on Wednesday morning.
Conte wanted to keep up to eight players he considers “untouchable”, including Milan Skriniar, Romelu Lukaku and Lautaro Martinez.
Lukaku is happy at Inter but Conte’s departure, coupled with the club’s need to cut costs, has put a question mark over his status at the club.
The club’s strategy, according to Sky in Italy, could include the sale of one of the club’s star players and a decision to focus on developing young talent.
Lazio manager Inzaghi is expected to replace Conte at San Siro. The former Italian striker has managed club Rome since 2016 and has led them to sixth place this season, finishing six points above fierce rivals Roma.