NEW YORK (CNNMoney.com) -- Conan O'Brien and NBC reached a deal Thursday to terminate the comedian's contract just seven months after he was named host of "The Tonight Show."
O'Brien will make his final appearance as host of "Tonight" on Friday, and will be free to "pursue other opportunities" as soon as Sept. 1, the parties said in a joint statement.
Jay Leno will return as host of "The Tonight Show" on March 1, NBC said. The one-hour show will be broadcast at 11:35 p.m. ET, followed by "Late Night with Jimmy Fallon," which will remain in its current 12:35 a.m.-1:35 a.m. time slot.
While details of O'Brien's exit agreement were not made public, people familiar with the negotiations said he stands to get a severance payment of about $32 million plus about $12 million for his staff.
The deal is also said to contain a clause that would prohibit both O'Brien and NBC from making disparaging comments about each other in public. It will also strip O'Brien of intellectual property rights to characters he created during his tenure at NBC, such as Triumph the Insult Comic Dog, according to people familiar with the terms.
"In the end, Conan was appreciative of the steps NBC made to take care of his staff and crew, and decided to supplement the severance they were getting out of his own pocket," Gavin Polone, O'Brien's manager, told the Wall Street Journal. "Now he just wants to get back on the air as quickly as possible."
The resolution brings to a close a weeks-long controversy that roiled the entertainment industry and sparked rallies in support of Coco, as O'Brien is known to fans, in cities across the nation.
O'Brien took over "Tonight" in June after his predecessor left to host "The Jay Leno Show" at 10 p.m. ET on weeknights. The move was aimed at saving the network money on prime-time costs. But Leno's show received lackluster ratings and NBC announced plans to cancel it just three months after the first broadcast.
The network then sought to give Leno a half-hour show at 11:35 p.m. ET, and move O'Brien's "Tonight Show" to 12:05 a.m. ET.
But O'Brien objected to the change. In a Jan. 12 letter addressed to "People of Earth," O'Brien said that moving the show back would "seriously damage what I consider to be the greatest franchise in the history of broadcasting."
The row has given rise to much speculation about where O'Brien will end up when he eventually returns to the airwaves.
Fox has reportedly expressed interest in hiring the 46-year old comedian, who cultivated a large following of younger viewers during his 17-year stint as host of "Late Night."
By contrast, Leno's brand of comedy is less edgy, and the 60-year old host is generally seen as more palatable to an older audience.
In announcing Leno's return, Jeff Gaspin, chairman of NBC Universal Television Entertainment, said "The Tonight Show" will continue to showcase many of the features that made it popular in the past.
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