An agreement has been reached for the principal of Christchurch Girls' High School, Prue Taylor, to return to the role.
Taylor was sacked on November 2 because of what the school's board of trustees said were "deep-seated, irreconcilable" differences.
She was temporarily reinstated three weeks later after an Employment Relations Authority found her dismissal was procedurally unjustified.
A statement issued tonight by law firm Chen Palmer said Taylor and the board of trustees have today reached an agreement "concerning her return to the role of principal of the school, and the resolution of all matters between them".
"The agreement includes mechanisms for resolving the issues which have arisen," the statement said.
"The parties are pleased to be able to move forward in a constructive manner. In reaching this agreement, the parties have focussed on what is in the best interests of the School and the girls in particular."
The board's chairman, James Margaritas, stood down from that role after a meeting late last month with parents concerned over Taylor's sacking. The parents called on the whole board to resign.
Board spokesman Tim Priddy said at the time that the board "made a decision on the safety and wellbeing of all the people at school".