Talk-show host Conan O'Brien has reached a $45-million deal with NBC to leave The Tonight Show.
NBC confirmed on Thursday that O'Brien will conclude his run on the show, just seven months after he took over the chair from long-running host Jay Leno.
"Under terms of an agreement that was signed earlier today, NBC and O'Brien will settle their contractual obligations and the network will release O'Brien from his contract," the network said in a statement.
O'Brien's last appearance on the Los Angeles-based show will be Friday, with his final guests to include Tom Hanks and Will Ferrell — his first guest as Tonight host last June.
Leno will return on March 1, following NBC's coverage of the Winter Games in Vancouver.
O'Brien will receive approximately $33 million US for exiting the show, while his staff of nearly 200 people will receive a total severance of about $12 million.
The agreement is also believed to include a "non-disparagement" clause for both O'Brien and the network. NBC also confirmed that O'Brien will have to wait until September before he can begin another TV job.
"Conan appreciated what NBC did to take care of his staff and crew, and decided to supplement the severance they were getting from the network out of his own pocket," O'Brien's manager, Gavin Polone, said in an interview.
As for future options, "while we have had expressions of interest, we have not had any substantive conversations with anybody," Polone added.
O'Brien "wants to get back on the air, doing the show he's doing now, as soon as possible."
News reports Wednesday said talks between NBC and O'Brien had been bogged down over what O'Brien's staff would be getting. O'Brien had been reportedly trying to negotiate better severance packages for his staff.
NBC had tried to initiate a smooth Tonight Show handover back in 2004 by announcing an O'Brien-Leno succession plan — in an attempt to avoid the chaos in the early 1990s when Johnny Carson retired.
However, when the time came for the switch last year, the network made the shocking announcement that it would replace five hours of weeknight programming at 10 p.m. with a new program titled The Jay Leno Show.
The show was panned by critics and achieved poor ratings, which drew the ire of NBC's affiliates, whose advertising and 11 p.m. local newscasts suffered drastically with Leno as a lead-in.
On Jan. 10, NBC announced it wanted Leno back in the 11:35 p.m. slot.
The announcement sparked a televised nightly war of words, with rival late-night hosts mocking the NBC fiasco and O'Brien saying he didn't want to be pushed back to just after midnight. He asked to be released from his contract, with 2½ years to go.
During his short tenure as host of The Tonight Show, O'Brien had not fared well in the ratings against his CBS rival, David Letterman.
When Leno first started out in 1992, he also faced lower ratings against Letterman, whom he had beaten for the Tonight gig.
This continued until 1995, when Leno's viewership soared after he landed an interview with actor Hugh Grant following his arrest for the actor's encounter with a prostitute.
From that point, Leno garnered increasing numbers of viewers and eventually reigned atop late-night ratings until his departure in June.