The dispute between the AFL and Essendon over coach James Hird’s pay has been resolved, with Essendon to pay the suspended coach's 2014 contract in full before the end of this year.

In discussions on Friday, the Bombers and the league resolved that the ‘‘implied terms’’ of their settlement deed were that Hird could not be paid by the club for a period of 12 months.

That period will now run from January 1-December 31 next year, with Hird able to return from his ban in September next year.

The AFL had threatened to withhold $100,000 of funding from the club each month until the matter was resolved, and Essendon chairman Paul Little said the situation had been an ‘‘unprecedented one’’ for the club and the AFL to deal with.

‘‘Whilst it is acknowledged that James Hird’s pay wasn’t dealt with in the formal Deed of Settlement between the Essendon Football Club and the AFL, complex discussions relating to James Hird’s legally enforceable employment contract have continued between the parties. It has been very difficult to have this matter adequately resolved whilst being played out in the public arena,’’ said Little in a statement issued by the club on Friday night.

‘‘To settle this impasse, the Essendon Football Club has resolved that it will pay James Hird in advance to cover the 2014 year consistent with Hird’s employment contract obligations. This also meets the implied terms of the Deed of Settlement. The implied terms of the AFL sanction indicate that James Hird cannot be paid for a 12 month period therefore he will not be paid during the calendar period January 1 – December 31, 2014.’’

‘‘The AFL has accepted the Essendon Football Club’s position that James will not be paid in 2014, and equally the AFL have accepted that the Essendon Football Club has the right to make payments to James Hird in the 2013 year as it sees fit."