Australian umpire Darrell Hair dropped his racial discrimination case against the International Cricket Council on Tuesday, the ICC confirmed.
Hair filed a lawsuit against the ICC in February after being dropped from the elite umpires list over his handling of the fourth Test between England and Pakistan last August.
However, his case at an employment tribunal in London collapsed on Tuesday after more than a week of evidence.
The ICC hinted that the 55-year-old, who has stood in 76 Tests, could still return to umpire at the highest level.
"Darrell Hair has withdrawn unconditionally his allegation of racial discrimination against the ICC board, its management and staff," an ICC statement said.
"Darrell Hair has undertaken to work with the ICC management over the next six months in accordance with a rehabilitation programme to be devised by the ICC in consultation with the umpire's manager.
"At its scheduled ICC meeting in March 2008, the ICC Board will consider the result of the programme and then consider when, and if so, on what terms Darrell Hair can return to umpiring Test matches and full member one-day internationals.
"In the mean time he will umpire in associate member matches, if selected."
The chain of events that ended up with Hair being stripped of his position began at The Oval in August last year when he accused Pakistan of ball-tampering and awarded England five extra runs.
Pakistan, who were in a reasonably strong position at the time, initially played on until the tea interval but their captain Inzamam-ul-Haq refused to take his players out for the resumption of play.
After a delay, Hair removed the bails and awarded the match to England by default.
At a meeting of the 10 Test-playing nations in November the ICC said they had "lost confidence" in Hair and that he would be excluded from the umpires list until his contract expired in March 2008.
No action was taken against Hair's co-umpire at the match, West Indian Billy Doctrove, leading to Hair's accusation that he had been singled out because he was a white umpire.
ICC president Ray Mali said he was pleased with the outcome.
"These allegations were serious and we had no option but to defend," he said on Tuesday. "We are pleased the issue is resolved and we can now move on."
Inzamam was cleared of ball tampering by the ICC but banned for four matches for bringing the game into disrepute.
