Paul Lambert, Aston Villa and Norwich City have agreed a settlement over a contract dispute between the three parties.
The Scot joined Villa from Norwich over the summer following three years at Carrow Road.
It was revealed in October that Lambert was attempting to sue his former club for around £2m for breach of contract.
However, the former midfielder then claimed that Norwich were also trying to sue him.
"Paul Lambert, Norwich City and Aston Villa have agreed settlement in respect of the dispute regarding Paul Lambert's departure from Norwich City, whereby 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," read a statement on Norwich's official website.
"This represents a final settlement of all claims and disputes between the parties. No further comment will be made."
Lambert gained successive promotions with Norwich on his way to leading them to the Premier League in 2011.
Jack Prescott
