Jose Mourinho tonight settled a massive compensation package with Chelsea and then declared he was proud of his achievements with the Barclays Premier League side.

Mourinho finally agreed on a financial settlement late this evening after agreeing to leave the club by mutual consent earlier in the day.

Chelsea have since appointed their director of football Avram Grant as his replacement.

Mourinho's decision to step down as manager was due to a breakdown in his relationship with the Chelsea hierarchy.

But he is set to land a reported £20million pay-off as compensation for the remaining three years of his contract - worth around £6m a year.

Mourinho said: "I am very proud of my work in Chelsea Football Club and I think my decision in May 2004 to come to England was an excellent one.

"It was a beautiful and rich period of my career. I want to thank all Chelsea FC supporters for what I believe is a never-ending love story.

"I wish great success to the club, a club that will be forever connected to me for some historical moments.

"I wish the players happiness in football and in their family life. Finally on my wife's and children' s behalf we thank the great professionalism of their school teachers and the beauty of so many friends".

After a night of negotiations at Stamford Bridge, Chelsea finally released a statement confirming that all contractual arrangements had been sorted out with their former coach.

The statement read: "Chelsea Football Club has reached agreement on all contractual arrangements with José Mourinho".