The betting company used the Norwegian's image alongside a Brexit-style jibe at Theresa May, promoting bets on the Manchester United caretaker getting the Old Trafford job permanently.
The ad appeared in Thursday's edition of the Evening Standard, which was given to the Norwegian during an interview for Scandinavian news outlet NRK on Friday morning.
It featured an image of Solskjaer clapping, alongside a Brexit-themed message that read "Theresa, time to try the Norwegian mode?" – advertising odds on the United caretaker to become a permanent manager at 1/16.
The 46-year-old coach reportedly laughed at first when he received the paper, but his demeanour turned stark upon seeing the ad.
Solskjaer reportedly said he would not led Paddy Power get away with the stunt as the image was allegedly used without his consent.
He said: "I promise you I will send this to my lawyer.
"They will have big problems with me. It is a betting company, I should not have anything to do with it."
However, Solskjaer is understood to have a sponsorship agreement with Norsk Tipping – the Norwegian national lottery – which are licensed to use his name and image.
But his lawyer, Erik Flagan, is not surprised with the alleged abuse of the Norwegian's image rights due to his rising popularity as the United coach – but insists they will now demand the ad to be removed and ask for compensation.
He told NRK: "This is illegal. The use of personal images in a commercial context without the consent of the depicted is illegal both in Norway and England.
"In this type of case, it is common to first prohibit and demand compensation. This is done routinely on behalf of Solskjaer in all such cases."
Paddy Power is well-known for risky PR stunts, with Nicklas Bendtner displaying underwear with the company's logo on it during Euro 2012 among most infamous examples.
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