Essendon say they have resolved the growing impasse over whether they can pay coach James Hird during his 12-month AFL suspension.

They announced late on Friday afternoon that they will pay him in advance for next year.

The AFL had threatened to withhold payments worth hundreds of thousands of dollars from Essendon until the matter was settled.

The league also threatened to take the issue to next week’s AFL Commission meeting.

“To settle this impasse, Essendon have resolved that it will pay James Hird in advance to cover the 2014 year consistent with Hird’s employment contract obligations,” the club said in a statement.

“This also meets the implied terms of the deed of settlement (for Hird’s suspension).

“The implied terms of the AFL sanction indicate that James Hird cannot be paid for a 12 month period therefore he will not be paid during the calendar period January 1 – December 31, 2014.

“The AFL has accepted Essendon’s position that James will not be paid and equally the AFL have accepted that Essendon has the right to make payments to James Hird in the 2013 year as it sees fit.

“The AFL and Essendon have now both accepted this matter is concluded to both of their satisfaction.”