"The two sides have reached an agreement for Kuban to pay Nikezic compensation of $256,000 for the final year of his contract," Nikolai Grammatikov, secretary general for the Russian players' union (RSFT), told Reuters.
Nikezic lodged a complaint with FIFA and UEFA this month alleging that he was beaten up and threatened with a gun at Kuban's training ground, forcing him to annul the final year of his two-year deal with the club.
"I was invited into a room where I was met by two strong men," Nikezic wrote in a letter to soccer's world and European governing bodies.
"When I refused to sign, saying I still have another year on my contract, I received a powerful blow to the liver. I simply feared for my life," added the former international, who represented Serbia and Montenegro at the 2004 Athens Olympics.
Grammatikov said: "I think they (Kuban) have realised it was the right thing to do and settle this case without any further complications. We could say common sense has prevailed."
Kuban officials were not available for comment but the club's general director Suren Mkrtchan was quoted as saying by Russian media that the case was being resolved.
Grammatikov said Kuban could still face sanctions by the Russian FA.
"Since the FA had already opened an inquiry into this case, they could punish the club if the allegations were found to be true," he said.
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.