Forest director John Pelling was relieved the whole dispute is finally over.
He said: "'We have settled with Pierre at a considerable discount to the amount that he originally claimed,
''We have never denied that money was due to Pierre. It was just a matter of how much and we have made provision for this expense in our accounts.
''Both sides have compromised to as amicable a settlement as can be achieved after a five-year long dispute."
Van Hooijdonk eventually transferred to Vitesse Arnhem for around £3m but is still Forest's record signing following his £4.5m switch from Glasgow Celtic.