Chelsea and former manager Jose Mourinho have reached an undisclosed settlement with former team doctor Eva Carneiro at an employment tribunal in London, the Premier League club said on Tuesday.
Carneiro had claimed constructive dismissal by the Premier League club and sexual discrimination by Mourinho who appeared at the tribunal and sat in the front row.
Terms of the settlement remained confidential. Carneiro rejected an earlier offer of 1.2 million pounds.
In a statement Chelsea said the club "regretted the circumstances" that led to Carneiro taking legal action and issued an unreserved apology.
Carneiro worked for Chelsea for six years until she left in September after clashing with Mourinho in the closing minutes of their opening Premier League match of the season against Swansea City at Stamford Bridge in August.
The 42-year-old ran on to the pitch with physio Jon Fearn after being called on by referee Michael Oliver to treat winger Eden Hazard.
After the game an angry Mourinho described the pair as "impulsive and naive" because it meant Chelsea being reduced to nine men near the end of the game after goalkeeper Thibaut Courtois had been sent off.
Carneiro, who claims she was subjected to sexist comments from colleagues, was relieved of her match-day duties soon afterwards.
Chelsea said she had acted properly.
"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," the club said.
"Dr Carneiro has always put the interests of the club's players first. Dr Carneiro is a highly competent and professional sports doctor," Chelsea added.
"She was a valued member of the club's medical team and we wish her every success in her future career."
Following the incident in the Swansea match the Football Association conducted an investigation after a member of the public complained about Mourinho's language towards Carneiro.
The FA cleared Mourinho of making discriminatory comments.
Mourinho, who won the Premier league three times in two spells as Chelsea manager, was fired by the club in December after a poor start to the season. He was appointed Manchester United manager last week.
Caneiro, 42, issued a statement saying she was relieved the long-running saga had come to an end.
"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," she said.
"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," Carneiro added.
"I would like to thank everyone who has supported me including my husband, family and friends and members of the football community."
