Bill Gross , who was fired from Pimco four decades after he co-founded the investment firm, has settled his lawsuit against the company for just over $81 million, sources told CNBC on Monday. He also gets a "Founders Room" named after him at the company's Newport Beach headquarters, along with the launch of a "Bill Gross Award," according to a Pimco press release.

A lawyer representing the Pimco co-founder filed a request in California state court to dismiss the fund manager's suit over his 2014 departure from the company. All proceeds from the settlement will go to charity — to the Sue and Bill Gross foundation.

Gross sued Pimco in 2015, claiming his dismissal from the company was a breach of contract, and a breach of covenant of good faith and fair dealing. Gross said at the time that he suffered damages in excess of $200 million.

"I knew I didn't have much to gain except for my self respect," Gross said on leaving Pimco. "I thought I was treated unfairly on the way out from Pimco. ... They fired me without really giving a reason for it. There was a small coup of individuals that threatened to resign if I didn't."

Pimco said in a statement Monday that it "recognizes the enormous contribution to its success made by Mr. Gross."

"Bill Gross has always been larger-than-life," Dan Ivascyn, Pimco's group chief investment officer, said. "He has a well-deserved stellar reputation as an investor and a philanthropist."

As part of the settlement, Pimco will name Gross — who left the company amid much confusion about his investment returns and what was claimed to be erratic behavior — as "Director Emeritus," according to Monday's press release.

After helping found the firm in 1971, Gross built it into one of the largest asset managers in the world.

"Pimco has always been family to me, and, like any family, sometimes there are disagreements," Gross said in a Monday press release. "I'm glad that we have had the opportunity to work through those ... I am honored to be included in their ranks and to know that Pimco is in capable hands."

The first sentence of Gross' 2015 lawsuit said he was pushed out of the company by a "cabal" of Pimco managing directors who were "driven by a lust for power, greed, and a desire to improve their own financial position."

The suit also targeted Mohamed El-Erian , who was once in line to succeed Gross, and Dan Ivascyn, the man who succeeded Gross as Pimco's group chief investment officer. El-Erian is now the chief economic adviser at Allianz, which took over Pimco in 2000.

Gross is now a portfolio manager for Janus Capital Group's global unconstrained bond fund.

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