A former detective, who was financially and professionally ruined by his own superiors for trying to bring a paedophile priest to justice, will receive compensation almost 50 years after he was pushed out of Victoria Police.

Denis Ryan gave up his police pension when he chose to resign from the force after being ordered to drop his investigation into Monsignor John Day, a Catholic paedophile priest who preyed on children in the Mallee.

The decision had a profound impact on his life, costing him a marriage and the prospect of a comfortable retirement. Until now, he has lived in a rented unit on the proceeds of an aged pension.

But a month after his plight was revealed by the ABC, the Victorian Government has reached a confidential settlement with the 86-year-old.

"Using a colloquial term, I'm out of my socks," said Mr Ryan from his home in Mildura.

"Heck it's a great, great thing to hear," he said. "It'll make quite a difference to me."

Mr Ryan said he had no plans for the money at this stage.

"When I come down to earth, I'll think about such things," he said.

But on the question of redemption, Mr Ryan was much more certain.

"I don't think I'll ever feel vindicated," he said.

"It'll never leave my mind," he said. "I just think of the victims, they suffered so much more than me."

When he resigned from the force, Denis Ryan lost his police pension and his benefits. ( ABC RN: Jeremy Story Carter )

'He was crucified for doing his job'

The details of the settlement have not been disclosed but it will be paid in a lump sum, according to Vernon Knight, who handled the negotiations on behalf of Mr Ryan.

"Denis is 86, he wants to live the remainder of his life with a measure of comfort and I guess validation, restoring some of the dignity that he would've lost over those years," Mr Knight said.

"We actually quantified that and said, 'Well wouldn't it be nice if you lived in your own unit and you had a few bob to do some of the things that you would've wanted to do?'"

But many in Mildura's tight-knit community see this as a recognition that goes far beyond the dollar amount Mr Ryan will receive.

"He was crucified for doing his job, for endeavouring to protect children and for endeavouring to call to account those who were responsible," Mr Knight said.

"At long last, he's had his day."

'Their allegiance was to a cathedral and not the people'

In the years after he resigned from the police force, Mr Ryan was forced to find work as a fruit packer and would later become mayor of the Mildura Shire.

But despite surrendering his badge, he pursued a relentless campaign to expose the role that Victoria Police's most senior officers played in covering up for Monsignor Day.

In 2015, Mr Ryan testified before the Royal Commission into Institutional Responses to Child Sexual Abuse.

"We do not doubt that Victoria Police transferred Detective Ryan from Mildura for investigating allegations that Monsignor Day had sexually abused children in Mildura," the royal commissioners wrote in their findings.

Victoria Police officially apologised to Mr Ryan in 2016, but the weight of the force's actions continue to weigh on him.

"I think very much of the then-children that are now adults whose lives have been shattered by the acts of a paedophile priest," he said.

"At the time, Gerald Ridsdale, who's another notorious paedophile, he would've been caught in the net if the police had listened to me ... but they didn't.

"Their allegiance was towards a cathedral and not to the people of Victoria that they'd sworn an oath to protect. They did not protect them."

But Mr Ryan had a message for the Premier.

"I certainly want to say to the Government of Victoria, led by Daniel Andrews, when he heard this, he leapt into action and finished within a month what has taken 47 years," Mr Ryan said.

"I'm very pleased. Thank you."