Manchester City Council said it has settled out of court with Thomas Heatherwick Studio Limited and subcontractors Packman Lucas Limited, Flint and Neill Partnership and Westbury Structures Limited over the design and construction problems of the sculpture B of the Bang, at Sportcity in east Manchester.
A settlement figure of £1.7m has been paid to Manchester City Council. As a result of the settlement agreement court proceedings, scheduled to take place later this month, will no longer go ahead.
The eye-catching artwork has been dogged by problems including spines repeatedly coming loose, endangering passersby and requiring frequent and costly repair work.
Susan Orrell, City Solicitor for Manchester City Council, said: "The settlement allows the council to recover substantial damages and avoid further cost and the risks that are always associated with legal proceedings. I am pleased we have reached a settlement that is, in my view, in the best interests of the council and now that this has been achieved, it means the council can move on and consider the options for the future of the structure in conjunction with the project's funders. When this work is completed a report will go to the council's executive in the New Year."
The defendants responded in a joint statement: "The B of the Bang sculpture was an ambitious and ground-breaking design. It is a matter of considerable regret to all of us that the sculpture that was intended to symbolise the outstanding success of the Manchester Commonwealth Games has suffered the problems that have come to light. We are pleased that a settlement has been reached to the proceedings."