William Makgoba had been suspended from his post at the University of the Witwatersrand since last year after releasing confidential personnel information about his detractors and accusing them of defrauding the university.
A subsequent inquiry found Mr Makgoba's accusations groundless, but the dispute exposed a racial divide in higher education as more blacks fill university posts only recently open to them.
The university's governing council announced yesterday that Mr Makgoba, a medical researcher, has agreed to become a professor in the faculty of health sciences, a demotion that carries no administrative responsibilities.
The agreement followed months of mediation between Mr Makgoba and 13 academics, all but one of them white, who accused him of lying on his curriculum vitae to inflate his academic qualifications and publications.
Mr Makgoba had apologised for raiding their files, saying he had been under stress, and admitted that some statements on his cv might "lend themselves to misunderstanding".