Watford FC have agreed a settlement with finance company LNOC.
In November the football club lost their High Court battle over loans worth £2.6m which were arranged by former owner Laurence Bassini.
The club had initially suggested they were planning to appeal against the ruling but the Hornets have now agreed an undisclosed settlement with the company.
During a hearing at the High Court in October, Judge Mackie QC heard that the loans had been "forward finance" deals borrowed against money coming to the club from Football League pool funds and also from Swansea City FC for the transfer of striker Danny Graham.
The loans made against pool funds were later found to be in breach of Football League regulations and this resulted in a transfer embargo on the club.
During the case, Watford's barrister Nicholas Randall argued Bassini was not acting in the best interests of the club when he organised the loans and that they were not binding.
The Hornets previously stressed provisions were in place to pay the LNOC money in last year's accounts, so the settlement won't have a negative impact on this year's budget.