Former Adelaide United coach Rini Coolen has withdrawn his unfair dismissal claim against the A-League club a week after a trial began in South Australia's District Court.

The club has also withdrawn its counterclaim against the Dutchman and his agent John Grimaud and it is understood the parties have reached an out-of-court agreement.

Coolen was seeking $2.2 million in unpaid wages and associated benefits after he was sacked as head coach in December 2011 following a series of poor performances.

He was demoted to the role of youth team coach but later quit with three-and-a-half years remaining on his contract.

Coolen launched legal proceedings against the club last year.

Included in his claim was $1.3 million in unpaid wages, $105,000 for the loss of a car, $107,000 for the loss of potential bonuses and several hundred thousand dollars for exemplary damages.

The club mounted a counterclaim, alleging Coolen and his agent misled them about his level of experience and a potential rival offer from a Japanese club before he was appointed.

Attempts to resolve the case through out-of-court mediation fell through in July and a trial into the matter began last week with Coolen giving evidence against his former club for the first time.

Court documents obtained by the ABC show the claims of both parties have now been withdrawn.

It is understood they are preparing a joint statement on the matter.

Coolen and the club are due back in court next month to allow the final paperwork to be lodged.