Leeds have agreed a settlement with Chelsea and dropped their complaint that the Premiership champions tried to poach three of their academy scholars.
Ken Bates raised the issue in August, when he accused his former club of breaking youth development rules to move teenagers Tom Taiwo and Michael Woods to Stamford Bridge.
He claimed Chelsea had also tried to persuade a third youngster to leave Elland Road - but Danny Rose opted to stay in Yorkshire.
Leeds chairman Bates called for the London club to be deducted points, thrown out of competitions and suspended from the transfer market.
He claimed financial punishment had no effect on the club bankrolled by billionaire owner Roman Abramovich.
The Premier League and the Football Association launched a joint investigation but Leeds have now withdrawn their allegations and accepted a settlement fee.
Chelsea have agreed to examine their internal procedure for recruiting youth team players but are understood to have made no admission of liability in the cases of Woods, Taiwo or Rose.
A joint statement from the Premier League and FA said: "The Premier League and Football Association today confirmed that Chelsea FC and Leeds United FC have reached a mutual agreed settlement with regard to an alleged approach to three Leeds United FC Academy players in breach of Premier League and FA rules.
"Leeds United FC has withdrawn their complaint and the Premier League has been advised by both clubs that any claims and litigation arising out of any alleged improper approach have been settled. This resolution is subject to a confidentiality agreement and there will be no further statements.
"Additionally Chelsea FC have undertaken to conduct an internal review of policies and procedures in relation to the recruitment of players, take steps to rectify any shortcomings; take the appropriate action in relation to club personnel, including Premier League approved training, and develop their own code of conduct.
"The Premier League and Football Association accordingly consider the matter closed."