The dispute led to the 20-year-old Niemann filing a $100 million (£79 million/€92 million) lawsuit against Carlsen, the Chess.com online portal and fellow American Grandmaster Hikaru Nakamura.

"We are pleased to report that we have reached an agreement with Hans Niemann to put our differences behind us and move forward together without further litigation," a Chess.com statement said.

Carlsen had accused his opponent of cheating at last September’s Sinquefield Cup in St Louis.

Niemann had beaten Carlsen, the five-time world champion who subsequently withdrew from the competition.

The online portal then "privately" suspended Niemann after revelations that he had cheated in online matches when he was 16.

Niemann subsequently accused Carlsen of conducting a smear campaign against him.

In June, Niemann’s lawsuit was rejected by a court in Missouri.

Since then the various parties have been discussing a settlement and Niemann has been reinstated by Chess.com and is now free to play again.

"I am pleased that my lawsuit against Magnus Carlsen and Chess.com has been resolved in a mutually acceptable manner, and that I am returning to Chess.com," Niemann said in a statement. 

"I look forward to competing against Magnus in chess rather than in court."

Niemann was back playing in an online match on the Chess.com portal yesterday.

Carlsen, winner of International Chess Federation (FIDE) World Cup here in Baku last week, has also welcomed the settlement of the case.

"I acknowledge and understand Chess.com’s report, including its statement that there is no determinative evidence that Niemann cheated in his game against me at the Sinquefield Cup," he said.

"I am willing to play Niemann in future events, should we be paired together.”

Nakamura had been cited in the legal action because he repeated the allegations in his online posts.

"It's good that it is behind us," he said in an online post. 

"A lot of things that were spawned out of this were very negative and definitely reflected very poorly on chess as a whole."