Former Australia fullback Israel Folau has settled his unfair dismissal case with Rugby Australia and Super Rugby team the New South Wales Waratahs, Folau and Rugby Australia said in a joint statement.
The terms of the settlement were undisclosed.
"Rugby Australia, NSW Rugby and Israel Folau have today settled their legal dispute following the dismissal of Israel Folau after he posted a religious message on social media," they said in the statement.
Folau launched legal action against Rugby Australia (RA) and the Waratahs when his four-year contract was terminated in May after he posted a meme on social media that said hell awaited homosexuals and other groups.
The settlement comes after Folau and RA went into the last phase of mediation at the Federal Circuit Court on Monday before the case was due to go to trial in February.
The 30-year-old, who cast his legal challenge as a fight for religious freedom, was seeking up to $AU14 million ($NZ14.7m) in damages for loss of income and sponsorship.
His social media post was condemned by LGBTI activists, former team mates and media pundits but RA's decision to sack him also angered the nation's conservative Christians.
A fund-raising drive set up by a Christian lobby group raised more than $AU2 million in donations to help his legal challenge.
The statement said Folau's social media post "reflected (his) genuinely held religious beliefs" and that he "did not intend to harm or offend" when he uploaded it.
"Mr Folau wants all Australians to know that he does not condone discrimination of any kind against any person on the grounds of their sexuality and that he shares Rugby Australia's commitment to inclusiveness and diversity," it said.
RA said it did not in any way agree with the content of the Folau's post.
"Inclusiveness is one of Rugby's core values and it welcomes all people to the game, including all members of the LGBTI community," the statement said.
Folau and RA both apologised in the statement.
"While it was not Rugby Australia's intention, Rugby Australia acknowledges and apologises for any hurt or harm caused to the Folaus," it said.
"Similarly, Mr Folau did not intend to hurt or harm the game of rugby and acknowledges and apologises for any hurt or harm caused."