The morning show host - who was removed from the network last year after making controversial comments on air - will be paid the remainder of her reported $69 million contract in the deal, the remaining value of her three-year contract.
In a statement released by NBC on Saturday, the network said that it had resolved its differences with Kelly and that she was no longer an employee.
Exit discussions have been ongoing since October 25th, with her Today hour being cancelled the following day.
When those stories began to fade, Kelly had trouble attracting an audience in the soft-focus world of morning television.
"What is racist?" she said on the show.
In a sense, Kelly was caught in a no-woman's land: some at NBC were suspicious of her because of the Fox News background, while her former audience at Fox resented her for tough questioning of Donald Trump on the presidential campaign trail.
This contributed to tensions between Kelly and NBC executives, including NBC News chair Andy Lack, who invested tens of millions of dollars in her hiring.
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There's no non-compete clause, meaning Kelly is free to seek other television work if she wants to. "Like back when I was a kid it was okay if you were dressing up as a character".
Last week, NBC announced that Al Roker would be taking over Kelly's slot on the 9 a.m. hour of Today.
She then defended a white reality star who dressed as singer Diana Ross, saying, "I felt like, who doesn't love Diana Ross?"
The backlash to Kelly was swift and immediate, exceeding the outrage she generated for her remarks years ago about Santa's race.
Kelly apologized for the comment in a letter to NBC staff, and later made an on-air apology. And Lack condemned Kelly's comments at a town hall, a clear sign that she had lost the support of the executive who helped woo her to the network.
It is unclear given these terms why the negotiations took so long to finalize, especially since the terms of Kelly's nondisclosure did not change.