Officials from both parties were tight lipped about the terms of the $39.5 million deal, but AWB is pleased to have cleared the final class action, filed for inadequate disclosure to the Australian market over its dealings in Iraq, hanging over its head.

At one point, there were four class actions filed against AWB, three in the United States and one in Australia.

Now, the only legal action against AWB is a civil case being pursued by the Iraqi government, which has been lodged in the US against 93 companies the Iraqis claim were in breach of the United Nations’ oil-for-food program’s guidelines.

The bedding down of the class action debt will please AWB executives, who, last year at the company’s annual general meeting said consolidating the legal debt was a high priority for the business.

Upon the settlement of the Watson case, AWB chairman Peter Polson said he was pleased the company could now provide certainty to its investors surrounding the debt to arise from the case.

He said AWB believed the payment was ‘commercially acceptable’, and was in the best interest of AWB shareholders.

“The company is pleased to put this matter behind it as this is the final legal matter directed against the company in Australia arising out of activities under the United Nations Oil For Food Program,” Mr Polson said.

Mr Polson’s claims that the deal was good for the shareholders were not mere rhetoric – there was a strong surge of positive market sentiment following the announcement.

AWB shares posted a healthy 9pc boost on the day the news of the deal became public, closing at a high of $1.08 on Monday, before dropping slightly to $1.06 on Tuesday.

Lawyers for the litigants, Maurice Blackburn said the settlement was a fair result.

Ben Slade, Maurice Blackburn Principal said his company’s clients were happy with the outcome.

”We believe this is a fair outcome particularly in light of circumstances we faced in calculating the loss for shareholders," said Mr Slade.

Over 100 retail and institutional shareholders joined retired farmers and former AWB shareholders John and Kaye Watson in pursuing the class action, which was lodged in April 2007.

They were originally pushing for $100 million in damages.