Monaco can continue to play in France's Ligue 1 after agreeing to pay €50m for the right to remain exempt from the country's tax laws.

The club had been threatened with expulsion from the league after the Ligue de Football Professionnel (LFP) voted last year to restrict admission, as of next season, to clubs whose head-offices are located in France. This decision was intended to strip Monaco of the privileges it enjoys by being based in a tax haven.

Monaco, the seven-times champions of France, have been affiliated to the French league for nearly a century but resentment of the club's tax advantages has intensified since the club was bought by the Russian billionaire Dmitry Rybolovlev and began splurging on stars such as Radamel Falcao and João Moutinho, all at a time when the rest of the clubs in the league faced tax hikes.

Monaco had reacted angrily to the LFP's ultimatum and demanded that their "unique identity" be respected, launching legal proceedings to get the LFP's decision overturned. The impasse was resolved with Friday's announcement that the club will make a "one-off, voluntary" payment of €50m in instalments. In return Monaco have dropped their legal campaign.

"Monaco announces that it has reached an agreement with the LFP that safeguards the club's continued participation in the French championships while retaining our actual and effective head office in the Principality," read a statement from the club.

"By making a voluntary, one-off, all-in contribution of €50m, which shall be payable in several instalments, Monaco demonstrates its attachment to French football and can pursue its project for the benefit of all stakeholders.

"The shared history between French football and one of its most faithful representatives enabled common ground to be found, allowing the dispute to be resolved in a way that ensures it will not arise again."