Jul 04, 2014 03:53 AM EDT By Staff Reporter, UniversityHerald Reporter

The Boise State University and American Athletic Conference have reached an agreement over the disputed $5 million exit fee.

In April 2013, the university filed a lawsuit in the 4th District Court claiming that it does not owe $5 million for cancelling its proposed entry into the Big East Conference (now named American Athletic Conference) in 2012.

The lawsuit was filed after a representative of the newly named American Athletic Conference planned to sue the University for Cancellation Penalty.

In December 2011, the Broncos Athletic Association signed an agreement to join the Big East in July 2013 for football. Since the conference lost three-quarters of its membership during 2012, failed to add more west-based football schools, a strong television package and lost its guaranteed spot in Bowl Championship Series bowls, the University decided to stay in the Mountain West Conference for all sports.

On Thursday, both the parties announced that they would drop their respective lawsuits after Boise State agreed to pay the negotiated $2.3 million exit fee. As a result, all the claims between the parties will be dismissed.

Out of the agreed amount, Boise State has already said $1.6 million to the AAC, the remaining $140,000 per year will be given over the next five years.

"We appreciate the willingness of the American Athletic Conference leaders to work with us to find an equitable solution for all involved," Boise State President Bob Kustra said, Idaho Statesman reports.

Besides Boise State, San Diego State and most long-time Big East members decided to quit for other leagues.

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