So here's a not incredibly trustworthy source saying it's not true:
"Lindsay Lohan will be the new face of Chanel
I e-mailed Chanel corporate with my opinion that Lindsay Lohan didn't really fit the Chanel image, she's too young, too unsophisticated. Got an e-mail back this morning from Chanel saying that Lindsay Lohan WAS NOT chosen to represent Chanel, so is this a confirmed thing or just hopeful rumor on Lindsay's part, like when she said she was chosen to be the female lead in Mission Impossible III?"
Source:
http://www.livejournal.com/community/ohnotheydidnt/4787958.html
Want to test it? Send an email to Chanel about it and see their reply.