PTI Holdings Inc., of New York, had emailed LeMond, telling him his line of signature products would be dropped two years into a ten-year deal because his name was not in the same league as Lance Armstrong's.
In 2002, PTI withdrew the LeMond line of helmets, saddle covers, locks and pedals. The line had been sold in US chain-stores such as Target but sales had been well below expectations.
LeMond filed suit against PTI in 2003 for breach of contract.
On Friday, a federal jury ruled in LeMond's favour, reports the Associated press.
LeMond's attorney said the $3.46m awarded was based on an estimate of royalties that LeMond would have received if the contract had been honoured.
PTI had wanted to terminate the deal in 2002 with a one-off payment of $1.1m, citing Lance Armstrong's "emergence as the dominant American cyclist."