Former Kawakawa Primary principal Peter Witana has resigned from his position at the school after the board withdrew its decision to dismiss him.
The agreement, reached at a recent meeting between the school's board of trustees and Mr Witana, ends all employment matters between the two parties. The agreement is understood to include a payment of an undisclosed sum.
The long-time principal left the 230-pupil school in August last year. The reason given for his departure at the time was "evidence of serious financial mismanagement" uncovered in a review.
A school newsletter sent to parents last week included a statement attributing Mr Witana's departure to a breakdown in his relationship with the board and heavy commitments outside school.
"Mr Witana acknowledges that his passion for education resulted in commitments that took him away from our school more and more, and this contributed to a deterioration in the relationship with the board," the statement read.
"In part this was caused by demands on his time from principal organisations, MOE [Ministry of Education] and government groups. He has apologised to the board that those circumstances resulted in a breakdown in relationships."
The statement added the board had agreed to accept Mr Witana's resignation and withdrew its decision to dismiss him.
It also stated that "the board and Peter Witana have always acted in the best interests of the school".
Board of trustees chairman Roger Dephoff said Liz Ross, former deputy head at Ohaeawai School, was continuing as acting principal until a permanent appointment was made. Applicants for the position had been narrowed down to a shortlist.
It was hoped a new principal would start next term.
Meanwhile, the school was planning a building beautification programme and an expansion of e-learning and IT initiatives.