If confirmed at the end of the show, it would make French director Julia Ducournau only the second female filmmaker to win the accolade.
Shouts and confusion ensued after Lee announced Titane, but Ducournau did not come to the stage to accept.
The ceremony continued and other awards were handed out while Lee was seen with his head in his hands.
Nadav Lapid's Ahed's Knee won the jury prize, while Caleb Landry Jones took home the best actor prize for his performance in Nitram.
The Croatian coming-of-age drama Murina, by Antoneta Alamat Kusijanovic, took the Camera d'Or award, a non-jury prize, for best first feature.
Kusijanovic was absent from the ceremony after giving birth a day earlier.
Cannes' closing ceremony caps 12 days of red-carpet premieres, regular Covid-19 testing for many attendees and the first major film festival to be held since the pandemic began in almost its usual form.
With smaller crowds and mandated mask-wearing in cinemas, Cannes pushed forward with an ambitious slate of global cinema. #
Last year's Cannes was completely cancelled by the pandemic.
Twenty-four movies are in contention for the Palme.
The jury's deliberations are private and unknown, but that never stops a wide spectrum of predictions, guesses and betting odds.
This year featured a strong slate of many top international filmmakers, but no movie was viewed as the clear favourite.
Among the best-received films at the festival were: Iranian director Asghar Farhadi's portrait of honour and social media A Hero; Chadian filmmaker Mahamat-Saleh Haroun's abortion drama Lingui; Thai director Apichatpong Weerasethakul's meditative, Tilda Swinton-led Memoria; French director Julia Ducournau's wild, high-octane serial-killer odyssey Titane; Sean Baker's The Florida Project follow-up, Red Rocket; Japan's Ryusuke Hamaguchi's Haruki Murakami adaptation, Drive My Car; and Russian director Kirill Serebennikov's influenza tale, Petrov's Flu.
Spike Lee is the first black jury president at Cannes.
His fellow jury members are Maggie Gyllenhaal, Melanie Laurent, Song Kang-ho, Tahar Rahim, Mati Diop, Jessica Hausner, Kleber Mendonca Filho and Mylene Farmer.