Alan Pardew will take over as manager of West Ham next month after Reading dropped their High Court action against him for breach of contract.
Pardew did a fine job at Reading
The Royals boss will be freed from his £150,000-per-year deal in time to
take over from caretaker manager Trevor Brooking on 18 October, when the Hammers play Burnley.
West Ham made Pardew their number one choice to take over from the sacked Glenn Roeder, but he was initially prevented from speaking to them about the job.
But Reading withdrew legal proceedings without the case coming to court after a compensation fee, believed to be around £380,000, was agreed between the clubs.
"I am delighted that the situation has been resolved without the need to involve the court and I am very excited to be confirmed as the new manager of West Ham United," Pardew said outside the High Court.
"Being a Londoner I am well aware of the tremendous stature and history of the club and understand the need to play the style of football the supporters
"I know how passionate they are about the club and I can't wait to take over
from Trevor and continue the job in hand of getting the club back into the
Premiership as soon as possible where it belongs."
Brooking, who has led the side to four straight wins during his second spell as interim manager, will remain in charge for the next seven games.
Pardew resigned from his position at Reading on 10 September after Royals chairman John Madejski denied him permission to talk to the Hammers.
The saga had threatened to drag on for months after Reading chairman John Madejski refused to accept Pardew's resignation.
"I think I've left a legacy that will continue to grow and I believe
(caretaker-manager) Kevin Dillon would be the right choice to take them
But Madejski's bid for an injunction against the 42-year-old failed, and West
Ham managing director Paul Aldridge now hopes the ill-feeling between the clubs will cease.
"Alan was always our number one target, although it is unfortunate that his
departure from Reading has caused so much acrimony," he said in a statement.
"I am however, pleased that common sense has prevailed and the matter has now been resolved.
"The Board would like to acknowledge the tremendous job Trevor has done
during this difficult period and know that he will ensure a smooth handover next month."
Pardew admitted the last week had been "hard and tortuous", but had a parting message for the Reading fans.
"I'd like to thank them for their support," he added.
Madejski announced they are likely to name Pardew's successor in the next few days, but refused to say whether Dillon will get the job full-time.
"We'll be looking at all our options before we make any decision," he said.
"I'm disappointed by what's happened but it's happened and we're delighted it's over with and now we can move on.
"I'm very disappointed by the sequence of events and I couldn't bring myself to wish him good luck with West Ham."