Norwich City have reached a settlement with former manager Paul Lambert over his departure from the club.

City chairman Alan Bowkett revealed in October that the club were being sued by Lambert for breach of contract and constructive dismissal after he left the Canaries to take over at Aston Villa. Lambert responded by announcing that Norwich were suing him and the matter was set to go to a tribunal.

But a statement on the official Norwich City website said: “Paul Lambert, Norwich City and Aston Villa have agreed settlement in respect of the dispute regarding Paul Lambert’s departure from Norwich City, whereby Villa will pay Norwich City the original amount as agreed in the contract between Paul Lambert and Norwich City, and Norwich City will pay Paul Lambert the bonus he was entitled to after completion of the 2011/12 season. This represents a final settlement of all claims and disputes between the parties. No further comment will be made.”

Lambert had other things on his mind on Sunday as his Villa side suffered their heaviest-ever league defeat, crashing 8-0 to Chelsea – who are the visitors to Carrow Road on Boxing Day.

“I’m not going to sit here and make excuses, we were well beaten, second best all over the pitch,” said Lambert. “We’ll have to pick ourselves up and go again on Wednesday, hurt as we are.

“Nothing really surprises me in football. I’ve been in it long enough to know you have to be bang at it every single game, but we were well below our standard of late.”