Paul Lambert and Norwich City have agreed a settlement in their dispute over his summer departure from Carrow Road.
Lambert, who led the Canaries from League One to Premier League safety in his three seasons at the helm in Norfolk, and Norwich were suing each other for breach of contract.
The dispute had seemed likely to go to a Premier League tribunal, but a statement from both Villa and the Canaries revealed agreement had been reached - something Lambert had stressed he hoped would happen.
Lambert had always denied doing anything wrong, saying he believed he was entitled to talk to any interested clubs, while Villa were insistent that they had acted in the proper manner when they appointed him as successor to Alex McLeish.
The statement, issued on Sunday evening, said: "Paul Lambert, Norwich City and Aston Villa have agreed settlement in respect of the dispute regarding Paul Lambert's departure from Norwich City.
"Villa will pay Norwich City the original amount as agreed in the contract between Paul Lambert and Norwich City, and Norwich City will pay Paul Lambert the bonus he was entitled to after completion of the 2011-12 season.
"This represents a final settlement of all claims and disputes between the parties. No further comment will be made."
Earlier this season, Lambert had voiced anger after Norwich chairman Alan Bowkett made the dispute public at a fans' forum, but later said he was keen for the matter to be resolved in an amicable way.
Information from the Press Association was used in this report