Simmons was appointed coach after the 2015 World Cup but suspended for a period and then sacked despite leading the Caribbean islanders to the 2016 World Twenty20 title in India.
New Cricket West Indies President Ricky Skerritt campaigned for the post promising to repair fractured relations with former players and met with Simmons in Antigua soon after his election to deliver a personal apology.
"We would like to apologise to you for referring to your appointment as a 'mistake'. Cricket West Indies did not make a mistake when we selected you as our head coach," he told Simmons.
"I was involved in the interview panel that recruited Phil Simmons from a long list of competitors and he was the best candidate," he added in a CWI press release.
"Subsequently, based on the results he produced on the field, he proved himself to be a very competent coach in his time with West Indies."
The terms of the financial settlement agreed at the Antigua Industrial Court on Tuesday would remain confidential, CWI said.
Simmons, who is currently preparing the Afghanistan team for this year's 50-over World Cup in England and Wales, said he was happy to put the matter to rest.
"My family and I are relieved that we have been able to finally close this matter, and I am pleased that it has been done so amicably," he said.
"Following the election on the weekend I am more confident than I have ever been that the future of West Indies cricket is in good hands.
"I am a very proud West Indian and I hope that in the future I get the opportunity to try and help move our cricket forward again."
First Published: March 28, 2019, 2:54 PM IST