Former France coach Raymond Domenech, sacked for misconduct after the 2010 World Cup, on Thursday accepted a 1million euros settlement from the French football federation (FFF).
The agreement announced by FFF president Noel Le Graet was ratified by the executive committee of the federation at a meeting in Paris.
The deal brings to an end Domenech's action against the FFF and means the matter will not now go before an employment tribunal.
"The Domenech case is over," Le Graet confirmed.
Domenech had been claiming 2.9 million euros in compensation.
Under the deal he gave up his entitlement to 150,000 euros in bonuses.
Domenech led France to a runners-up finish at the 2006 World Cup in Germany but the rest of his tenure, which began in 2004, became synonymous with failure.
After a group-stage exit at the 2008 European Championship, France were eliminated at the same stage of last year's World Cup with only a single point and a single goal to their credit.
Their showing in South Africa was overshadowed by a training ground strike by the players, who were protesting after Chelsea forward Nicolas Anelka was excluded from the squad for clashing with Domenech.
The FFF were particularly aggrieved that Domenech read out the players' statement to the media explaining why they had elected to go on strike.
He was also criticised for refusing to shake hands with South Africa coach Carlos Alberto Parreira after France's final group game.