"As part of the deal, Jorge Sampaoli's severance pay will be paid, including vacation days, salary for the month of January, and the awards owed to him for the last qualifying matches," the ANFP said in a statement on its website on Tuesday.
"For his part, the ex-coach signed an IOU and agreed to pay a fee to the ANFP... and agreed to renounce the totality of his bonuses for the 2015 Copa America tournament."
The Argentine coach, who led Chile to their first victory in Latin America's Copa America tournament in 2015, said last week that he no longer feels respected in Chile and was hoping to resolve his differences with the ANFP in order to end his contract early.
Local media have reported that Sampaoli is engaged in talks with a number of clubs, while ANFP president Arturo Salah said the agreement would allow them to search for a new coach.
Former Argentina and Chile coach Marcelo Bielsa and current Celta Vigo coach and Bielsa's former assistant Eduardo Berizzo are likely candidates to take Sampaoli's post, local media reported.
"Now we're going to dedicate ourselves to our priority: making sure that Chile qualifies for the World Cup in Russia in 2018," said Salah.
Chile are currently fifth in South America's 10-team World Cup qualifying competition with the top four securing automatic places at Russia 2018. The fifth-placed side goes into a playoff against a team from Oceania.
(Reporting and writing by Anthony Esposito and Gram Slattery; Additional reporting by Felipe Iturrieta; Editing by Toby Davis)
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