Former Chelsea assistant manager Ray Wilkins has agreed a compensation package with the club after he was dismissed on November 11.
The former club captain was relieved of his duties last month after helping manager Carlo Ancelotti guide the Londoners to a Premier League and FA Cup double last term.
With former Nigeia international Michael Emenalo handed the number two role, Wilkins is pleased the issues have been resolved and both parties can move on.
"It has obviously been a big wrench leaving such an illustrious club and one which has played such a huge role in my playing and coaching career," Wilkins said in a message left on the League Managers Association's official website.
"I have great affection for the club, the staff, the players and its supporters and wish them all the very best for the remainder of this season and the future.
"I would also like to thank the club and the LMA for ensuring that matters have been brought to a swift and harmonious conclusion."
LMA chief executive Richard Bevan added: "All parties are delighted that an agreement has been reached in a cordial and professional manner.
"I am sure that a manager of Ray's experience will be back involved in a managerial or coaching capacity soon."
Chelsea chief executive Ron Gourlay said on Chelsea's official website: "I am pleased to announce that we have come to a swift and amicable agreement with Ray Wilkins and all unresolved matters have now been settled.
"I would like to take this opportunity to thank Ray for his service to the club and wish him all the best for the future."