The Very Reverend Brandon Jackson, 62, is expected to be given a substantial settlement after agreeing to leave his post to settle the row in the Lincoln diocese. Downing Street is expected to make the announcement on Thursday.
Dr Jackson has been involved in a bitter dispute with his sub-dean, Rex Davis, since the late 1980s, when Canon Davis's fundraising trip to Australia with the Lincoln copy of the Magna Carta incurred losses of more than pounds 50,000.
The diocese has been torn apart by squabbles and personal jealousies ever since, in a feud described by The Archbishop of Canterbury as a "scandal dishonouring the name of our Lord".
Tensions were raised further when a part-time verger, Verity Freestone, alleged Dr Jackson had attempted to have a sexual relationship with her.
He was, however, acquitted of conduct unbecoming a man in holy orders, following a four-day consistory court hearing in July, 1995. Miss Freestone, 33, had claimed Dr Jackson commented on how attractive she was, and once told her she had "come-to-bed-eyes".
Dr Jackson, 62, denied the allegations and after his acquittal accused a canon of lying, and the bishop of taking part in a conspiracy against him. He then called for the cathedral to be closed for six months so that it could be exorcised of evil.
Dr Jackson was asked to stand down last year by the Archbishop of Canterbury, but he refused to go without a generous pay-off. "I am ready and willing to go when the Archbishop comes up with the cash," he said at the time.
It was reported that he would agree to stand down for a sum in excess of pounds 250,000, and yesterday it appeared he had agreed a figure.
The compensation could be high because he believes he is unlikely to get another ministry, given his age, and the circumstances surrounding his departure from Lincoln.
Dr Jackson is thought to have tendered his resignation to the Prime Minister, who is responsible for appointing many English cathedral deans. Colin BrownReuse content