Cricket Australia have reached a "confidential settlement" with former coach Mickey Arthur following his sacking.

The 45-year-old, who took charge of the national team in 2011, was replaced by Darren Lehmann at the end of June.

The South African opened legal proceedings against Australian cricket's governing body earlier this month due to alleged racial discrimination.

"Cricket Australia (CA) and Mickey Arthur are pleased to announce that they have reached a confidential settlement," read an official statement. "Both Mickey and CA agree that it is unfortunate that the dispute was not settled prior to the issuing of legal proceedings.

"Both parties agree that a resolution now is in the interests of the Australian cricket team and cricket generally in Australia.

"Cricket Australia appreciates the efforts that Mickey applied to his coaching role, and wishes him the very best in his future career."

Australia are currently preparing to take part in the third Ashes Test against England at Old Trafford that starts on Thursday.