Carneiro also agreed to drop a claim of sex discrimination and harassment against the former Chelsea manager José Mourinho as part of the confidential deal struck on Tuesday.
In a statement, Chelsea apologised “unreservedly” to Carneiro over the incident that led to her departure, when she ran on to the pitch during a match at Stamford Bridge last August to treat an injured player.
Carneiro’s lawyer had earlier told the employment tribunal that she heard Mourinho, angered by her decision, call her a “daughter of a whore” in Portuguese as she went onto the pitch.
In its statement on Tuesday, Chelsea said it now accepted that Carneiro had done nothing wrong and that she was a “highly competent and professional sports doctor”.
The tribunal heard on Monday that she had earlier been offered £1.2m to settle, which she had rejected. Carneiro was due to begin testifying on Tuesday afternoon, but her appearance was delayed as the deal was thrashed out.
The settlement prevents what was expected to be a bruising encounter between the two sides, and came a day after lawyers for Mourinho and Chelsea FC had denounced a witness statement submitted by Carneiro.
In a skeleton argument placed before the employment tribunal, the lawyers said: “Just 10 days prior to the hearing, [Carneiro] ... made a series of scandalous, irrelevant and untrue allegations for the very first time in her witness statement which she never complained about during her employment.”
Carneiro was due to give evidence for up to two and a half days and Chelsea’s lawyers said she was making “an extravagant compensation claim”.
Before the settlement and the club’s apologetic statement, Chelsea and Mourinho’s lawyers alleged Carneiro’s attitude to work had raised concerns. They said she was “increasingly pre-occupied with developing her profile”, including signing autographs and posing for photographs. They said she tried to sit behind Mourinho in televised matches and “secretly briefed against Chelsea to the media”.
On Monday, the first day of the hearing, the employment tribunal, in Croydon, south London, heard that Mourinho had criticised Carneiro and the physiotherapist, Jon Fearn, for running onto the pitch during a match against Swansea last August.
Their decision meant the team was temporarily reduced to nine men, angering the manager. Carneiro’s lawyer said that she heard Mourinho call her a “daughter of a whore” in Portuguese when she ran on to the pitch.
But in a witness statement, Mourinho claimed he shouted “filho da puta”, which means son of a whore, and that it was not directed at the doctor.
Mourinho subsequently demoted Carneiro from first-team duties, criticising her and Fearn as “impulsive and naive”. Carneiro later left the club.
In a statement on Tuesday, Carneiro said she was relieved to be able to move on from “a deeply difficult and distressing time for me and my family”.
“My priority has always been the health and safety of the players and fulfilling my duty of care as a doctor. In running onto the pitch to treat a player, who requested medical attention, I was following the rules of the game and fulfilling my medical responsibilities.”
Chelsea released its own statement apologising for any distress caused to the club’s former team doctor.
It said: “The club regrets the circumstances which led to Dr Carneiro leaving the club and apologises unreservedly to her and her family for the distress caused.
“We wish to place on record that in running onto the pitch Dr Carneiro was following both the rules of the game and fulfilling her responsibility to the players as a doctor, putting their safety first.
“Dr Carneiro has always put the interests of the club’s players first. Dr Carneiro is a highly competent and professional sports doctors. She was a valued member of the club’s medical team and we wish her every success in her future career.
“Jose Mourinho also thanks Dr Carneiro for the excellent and dedicated support she provided as first team doctor and he wishes her a successful career.”
Carneiro had previously demanded a personal apology from Mourinho, which was not forthcoming in the Chelsea statement, which merely expressed the former manager’s thanks for her efforts during her employment.
This article was written by Haroon Siddique and Robert Booth, for theguardian.com on Tuesday 7th June 2016 15.46 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010