The club and Ponson were scheduled for a three-day arbitration hearing this week in Baltimore, but the sides agreed to settle before the hearing began, according to a source with information on the case.
No specifics were released and a confidentiality agreement was signed, according to the source, who called the final value "mutually agreeable."
Neither the Orioles nor Ponson's side would comment. In addition, no official announcement was made by Major League Baseball or its players union.
It puts an end to one of the more embarrassing sagas in club history.
Ponson signed a three-year deal worth $22.5 million in January 2004 - a contract, like all those in Major League Baseball, that is guaranteed under the sport's collective bargaining agreement.
However, the Orioles unilaterally voided the deal in September 2005 with more than one year to go after Ponson was arrested for the third time in nine months.
Ponson spent 11 days in jail in his native Aruba after allegedly punching a judge during a Christmas Day 2004 fight on the beach. Less than a month later, he was arrested on a drunken-driving charge in Fort Lauderdale, Fla. Ponson was again arrested on a drunken-driving charge Aug. 25, 2005, in Baltimore.
He was released by the club, which invoked the "personal conduct" clause in standard contracts to void the deal. The Major League Baseball Players Association filed a grievance on behalf of Ponson, and the matter remained stalled until this week.
Orioles general counsel H. Russell Smouse was expected to represent the team, while union general counsel Michael Weiner was to have handled the case for Ponson.
The arbitrator, Shyam Das, would have been charged to rule in favor of either the Orioles or Ponson, with no middle-ground compromise.
It would have been a decision followed closely by the union and management, potentially redefining baseball's meaning of the guaranteed contract. Similar disputes also have been settled without an arbitrator's decision. in the past.
Setback in Sarasota
The Sarasota County, Fla., commissioners voted Wednesday not to increase the tourism tax, significantly decreasing the likelihood the county will build a new spring training stadium to entice the Orioles.
The county has agreed to allocate $22 million to renovate Ed Smith Stadium instead of the $33 million earmarked for a new ballpark and facility, which the Orioles covet. The county is expected to present a new proposal to the Orioles soon, a county spokesperson said.
The Cincinnati Reds, who play their spring games at Ed Smith Stadium, are moving to Arizona in 2010. The Orioles have made their spring home in Fort Lauderdale since 1996, but they are looking for an upgraded facility that can hold both their minor and major league complexes. The Orioles' minor league camp is based in Sarasota.
The Orioles also have had interest in Vero Beach, home of the Los Angeles Dodgers until 2008, but the Indian River County commissioners voted earlier this week to rescind their proposal and not negotiate with the Orioles for 30 days.
