Judy Martin (45), who was Ireland's first female cathedral organist, claimed she was forced to resign her €34,000-a-year job owing to an on-going campaign of "bullying, harassment and intimidation" by the Dean of Christ Church, the Very Reverend Dermot Dunne.
However, following several hours of discussions between representatives of the church and Ms Martin, and after three days of evidence, an employment appeals tribunal was yesterday told the case was being withdrawn.
Peter Shanley, for Ms Martin, told the tribunal he was pleased to announce that the case has been "resolved amicably to the satisfaction of both parties".
No details were given.
Ms Martin, who was once described as "the greatest conductor of her generation", did not comment.
She was employed as musical director at the Dublin cathedral from June 2003 to January 2011.
Relations between Ms Martin and the dean, the most senior cleric at Christ Church, broke down following a meeting between the two to discuss the crisis in the church's finances.
The dean put forward three options for funding cuts for the choir.
Ms Martin said the dean had authorised her to tell the choir about the options; however, she was later accused of gross misconduct for allegedly communicating confidential church information.
She said the alleged bullying led her to develop psychological problems and physical illness, and in February 2011, after a leave of absence, she decided to resign.
The dean denied the allegations made against him.
His barrister, Michael MacNamee, said any issues that arose between his client and Ms Martin were the result of her "resistance to change" as part of an internal reorganisation.