Northern Territory Police Commissioner Jamie Chalker has announced his retirement after agreeing to a confidential settlement with the NT government.

The settlement brings an end to the legal battle over Mr Chalker’s dismissal, preventing the matter from proceeding to a Supreme Court hearing.

Although the details of the settlement are confidential, Sky News has been told Mr Chalker was seeking more than a million dollars in compensation over the government’s botched attempts to have him dismissed.

Sources had previously revealed Mr Chalker was seeking payment for the rest of his existing contract, which expired in November, a “significant part” of a subsequent contract that he would have sought, as well as compensation for reputational damage and mental stress.