Houston's trophy is currently listed at USD 10,000 on Heritage Auctions' website along with her other belongings such as her passports and wedding dress.
According to a complaint filed in California federal court, the Television Academy claims that the statuette does not belong to the singer as awards are loans not gifts, reported Billboard magazine.
The Academy claims that the sale will undermine the prestige of the award.
"When the Television Academy honors an artist for an achievement, it lends a copy of the Emmy Statuette to the artist to signify and symbolize the honour.
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Houston won the Emmy for outstanding individual performance in a variety or musical in 1986 for "Saving All My Love for You," which she performed at the Grammys.
The Academy claims there was a notice affixed to the bottom of the award that makes it clear an honoree or heir can't sell it.
That notice wasn't attached when Houston's received it, according to the complaint, so the auction house has ignored previous warnings from the Academy.
Houston was found dead in the bathtub of her hotel room on February 11, 2012. She was 48 at the time of her death.