New Mexico coach Sven Goran Eriksson will receive his £500,000 bonus from Manchester City for clinching UEFA Cup qualification last season.
City owner Thaksin Shinawatra has overruled a recommendation by his senior aides to contest the payment.
Their qualification for the UEFA Cup after a ninth-placed finish in the Barclays Premier League triggered the bonus for Eriksson, whose one-year spell at City was formally ended on Monday.
Thaksin said: "The deal with Sven is amicable, it is friendly. We've agreed to the bonus because he deserves it. He did take us into Europe.
"We must respect him for that. Now he has a new job and I wish him well. 'Portsmouth go into the UEFA Cup because they won the FA Cup, AC Milan go in for finishing high in Serie A - we will go into the UEFA Cup as the winners of Fair Play!
"I feel OK about this. It offers a new and exciting challenge for the new season."
Some City senior powerbrokers wanted to challenge the pay-off in the courts.
"We have got into Europe because the players tackled fairly," said one.
But Thaksin wants to be seen to be fair with sacked Eriksson and says they "remain friends".