Aston Villa have reached an impasse with Martin O'Neill over the terms of his exit from the club last August, and the matter will now be referred to the Premier League Managers' Arbitration Tribunal.
The manager's representatives have been in talks with the club for months to try and thrash out the financial details of his departure but they have been unable to come to any agreement.
A statement issued by the League Managers Association on Thursday read: "Premier League managers' contracts contain a clause requiring the parties to mediate their differences in the event of a dispute, and, if the dispute cannot be resolved at mediation, that the case moves forward to the Premier League Managers' Arbitration Tribunal.
"Regrettably, despite mediation, it has not been possible to resolve the dispute between Martin and Aston Villa concerning the termination of his employment with the club, the matter has now been placed in the hands of the Premier League Managers' Arbitration Tribunal.
"The tribunal is ideally placed to resolve disputes of this nature, combining the skills and experience of prominent individuals from football and the law."
Meanwhile, O'Neill has started legal action against the Daily Mirror demanding libel damages of up to £200,000. It relates to stories and a cartoon published last summer.
In one story the paper alleged he had held secret negotiations to become the new manager of Liverpool. By innuendo. it is claimed O'Neill would walk out on Villa and would also break Premier League rules. There were several other stories on O'Neill quitting Villa, with one claiming he had lost the dressing room.