Hull have appointed former Colchester boss Phil Parkinson as their new boss.
Parkinson has been in charge at Layer Road since 2003
The U's had taken out a temporary injunction to prevent Parkinson walking out on them but then club chairman Peter Heard agreed to let him go.
City chief Adam Pearson decided on Thursday to pay £400,000 compensation to United for the 38-year-old, who then had his resignation accepted by Heard.
Parkinson replaces Peter Taylor at the KC Stadium after he quit to join Crystal Palace a fortnight ago.
"We are delighted to announce the appointment of Phil Parkinson as the new manager of Hull City, and that he will commence work in Hull on Friday," said a statement on the club website.
"It has been a long two weeks of negotiations since Peter Taylor left on 13 June.
"However, we have finally secured one of the brightest managers in the game and one who has been coveted by many, many clubs in the Championship over the last year.
"It has been a difficult two weeks, however the approach of specifically only wanting Phil Parkinson as the new manager has brought its ultimate reward.
"We have paid significant sums of compensation to Colchester United and the fee is in excess of the £300,000 received for Peter Taylor, however it is an investment that will pay for itself very quickly.
Parkinson added: "I'm very pleased it's been sorted out. It's a shame it came to this. I'll be going up there on Friday."
Colchester stipulated that Parkinson would be unable to raid the Us for any of the players he worked with during their promotion season from League One.