After five-hours of talks with the DFB, Hamburg agreed to withdraw their appeal to be reinstated in the Cup after losing to SC Paderborn last year in a match refereed by Robert Hoyzer, the man at the centre of Germany's soccer betting scandal.
"It became clear there would be insurmountable problems if the result of the game was revoked," Hamburg lawyer Christoph Schickhardt said. "Therefore we are withdrawing our appeal to be slotted back into the competition," he added.
Hamburg will be allowed to host a Germany friendly against either China or Japan in October, and will receive a direct sum of Û500,000 as well as a guarantee by the DFB of profits of at least Û1.5 million from the friendly.
The DFB co-president, Theo Zwanziger, said at a media conference: "We wanted to signal to Hamburg, that we as the DFB are responsible for the case and want to stand up to this. We are aware of the damage suffered by Hamburg because of the manipulation of the Cup game."
The DFB announced last week they were satisfied Hoyzer, 25, had manipulated the result to favour betting on the game. Hamburg took a 2-0 lead but went on to lose 4-2 after Hoyzer sent off striker Emile Mpenza in the first half for insulting him and awarded two penalties to the regional league side.
The chairman of Hamburg, Bernd Hoffmann, said that the compensation decision proved they had been right to lodge their appeal. "We have defended the club's rights at the same time as preventing any further damage to German football with a lengthy legal process," he said.
The match-fixing scandal, the biggest in 30 years, has tarnished Germany's image in the year before it is due to host the World Cup. On Thursday, Hoyzer was barred from refereeing on the grounds of gross sporting misconduct.
Germany's Sueddeutsche Zeitung reports today that Hoyzer had admitted to trying to involve the Bundesliga referee Torsten Koop in the betting scandal. Koop, who has been injured since August 2004 told the DFB Hoyzer had boasted to him about manipulating games, the paper said. Koop said he did not report Hoyzer because he thought he was just bragging. Berlin prosecutors are investigating 25 people in connection with the case including Hoyzer, three other referees and 14 players.