The San Jose Sharks and former forward Evander Kane have settled a grievance over his contract termination last season before the matter would have gone to arbitration.

The NHLPA filed a grievance on behalf of Kane in January after the Sharks terminated his deal, citing a breach of his contract and a violation AHL COVID-19 protocols. Kane was in the fourth year of a seven-year, $49 million contract that paid him $7 million on average annually.

Kane signed a free agent contract with the Edmonton Oilers last season and then signed a four-year extension with the Oilers this summer.

An NHL source tells ESPN that the settlement is expected to bridge the gap between the money owed Kane by the Sharks and the money he's making on his new deal with the Oilers.

Kane was due $19 million in salary for the last three years of his San Jose contract. The first three years of his new deal with the Oilers pay him a combined $16.5 million in salary. An NHL source believed the settlement will generate a cap hit that will be retroactively applied to the 2021-22 Sharks' salary cap. They finished last season with around $4.9 million in cap space.

"The agreement has been approved by the NHL and the NHL Players' Association," the Sharks said in a statement. "We are satisfied that its terms will not adversely impact the team, either financially or competitively, in this or future seasons."

Kane's agent Dan Milstein declined comment to ESPN. Milstein said at the time of the grievance that "the Sharks do not have sufficient grounds for taking this action."

The NHLPA said in a statement that it is "pleased to have the matter between Evander Kane and the San Jose Sharks resolved."

The split between the Sharks and Kane began before the 2021-22 season. Kane was investigated by the NHL after his estranged wife Anna Kane said he bet on NHL games and was "obviously throwing games to win money." The NHL investigated those claims and found no evidence to back them up. But as training camps opened, the NHL was still investigating allegations of physical and sexual abuse made by Anna Kane against Evander Kane.

The Sharks decided Evander Kane would not take part in camp. The NHL eventually concluded that "the allegations of domestic abuse made against Kane by his estranged wife could not be substantiated."

On Oct. 5, 2021, the NHL began investigating Kane for allegedly submitting a fraudulent COVID-19 vaccination card. On Oct. 18, the league concluded its inquiry and levied a 21-game suspension against Kane for violating its policy. Kane released a statement saying he "made a mistake, one I sincerely regret" and pledged to receive counseling toward making better choices in the future.

After the suspension, Kane was placed on waivers and sent to the AHL San Jose Barracuda. Kane was accused of violating league rules by traveling to Vancouver while he was in COVID-19 protocol in December 2021.

The NHL investigated that violation and said in its report that there was insufficient evidence to "conclusively find that Mr. Kane knowingly made misrepresentations regarding his COVID-19 status or test results in connection with his international travel."

Kane was allowed to sign with the Oilers as a free agent. He had 39 points in 43 games with Edmonton and 13 goals in 15 playoff games.