Chelsea and Jose Mourinho have reached a settlement with ex-team doctor Eva Carneiro over her claims that she was constructively dismissed by the club, and victimised by its former manager.
Dr Carneiro had brought the claim at an employment tribunal, accusing Mourinho of victimisation and discrimination.
She was due to begin giving evidence today but after last-minute talks between the parties, a settlement was agreed.
Mourinho made a surprise appearance at the hearing at the London South Employment Tribunal centre in Croydon.
Addressing the tribunal, Daniel Stilitz QC, for Chelsea and Mourinho, said: "We are pleased to be able to tell the tribunal that the parties agreed a settlement on confidential terms."
The case was expected to last seven to 10 days and could have led to potentially embarrassing witness statements and documents - including texts and emails - being made public.
On Monday, it was revealed that Dr Carneiro had refused £1.2 million to settle her claims with Mourinho and Chelsea.
Chelsea said in a statement: "The club regrets the circumstances which led to Dr Carneiro leaving the club and apologises unreservedly to her and her family for the distress caused.
"We wish to place on record that in running onto the pitch Dr Carneiro was following both the rules of the game and fulfilling her responsibility to the players as a doctor, putting their safety first.
"Dr Carneiro has always put the interests of the club's players first. Dr Carneiro is a highly competent and professional sports doctor. She was a valued member of the club's medical team and we wish her every success in her future career."
It added: "Jose Mourinho also thanks Dr Carneiro for the excellent and dedicated support she provided as First Team Doctor and he wishes her a successful career."
In a statement Dr Carneiro said: "I am relieved that today we have been able to conclude this tribunal case. It has been an extremely difficult and distressing time for me and my family and I now look forward to moving forward with my life.
"My priority has always been the health and safety of the players and fulfilling my duty of care as a doctor. In running onto the pitch to treat a player, who requested medical attention, I was following the rules of the game and fulfilling my medical responsibilities.
"I would like to thank everyone who has supported me including my husband, family and friends and members of the football community."
Dr Carneiro had alleged that she was sexually discriminated against after she went on to the pitch to treat Eden Hazard during the opening day of the Premier League season last August.
She claimed that, as she ran on to the pitch during the game with Swansea, Mourinho shouted "filha da puta" at her.
In a statement to the tribunal, Mourinho conceded that he used the term "filho da puta", meaning "son of a whore", but insisted he had been using it throughout the match.
He said: "Filho da puta is a phrase I often use, all of the players know it. There is no sexist connotation in the use of the phrase - it is just like saying 'f*** off'.
"In the world of football, a lot of swear words are used."
He added that Cesc Fabregas had used the Spanish equivalent of the term when a Chelsea player was fouled during the game.
In his statement, Mourinho said: "Cesc and I both speak English well, but in the heat of the game we both swear in our mother language.
"Eva was not on the pitch at that point in time."
Mary O'Rourke QC, representing Dr Carneiro, said: "He uses the word 'filha' because he is abusing a woman."
The 42-year-old further alleged that, on August 10 last year, Mourinho told Steve Atkins, head of communications and PR at Chelsea, that he did not want Dr Carneiro on the bench at the next match, adding: "She works in academy team or ladys (sic) team, not with me."