A secret council meeting last night agreed to allow suspended finance director and former acting chief executive Ian Coleman to take his pension early and leave the authority.
The decision was reached as "it would not be in the public interest" to enter into a drawn out legal process.
Mr Coleman was one of four high-ranking council officials suspended from work in the wake of an investigation by local government watchdogs the audit commission.
The inquiry was triggered when a group of whistle-blowers in the highways department raised their concerns with Birkenhead MP Frank Field about the way an "outsourced" contract with the Colas company had been handled.
Their story was revealed exclusively in the Wirral Globe.
The decision has led to a record number of comments on the Globe's website since we exclusively revealed it last week.
Graham Burgess, chief executive of Wirral Council, said today: "At a meeting of the employment and appointments committee [last night] it was agreed that the pension of Ian Coleman would be released, at a cost to the council of £82,528 to be paid over five years.
"This follows the meeting of an all-party investigatory and disciplinary committee, which considered the report of an investigation following Mr Coleman's suspension.
"This cross-party committee agreed that it would not be in the public interest to enter into a protracted legal process, with an uncertain outcome, considering the need to move forward and make new appointments to face the current budget challenge."
Mr Burgess said this process could have taken a considerable amount of time and resulted in costs upwards of £1m to the taxpayer.
He added: "To ensure full transparency the council will publish the reports presented to investigatory and disciplinary committee surrounding the suspended officers at the earliest point that it is legally possible to do so.
"We are not able to comment on the cases of the other suspended officers still under investigation."
The meeting last night at which the decision was reached was declared "exempt" from the press and public - and was so secret that even councillors summoned to attend were not given details of its purpose.
Council leader Cllr Phil Davies told the Globe: "The disciplinary committee had concluded there was not a clear prospect of a successful outcome and that the investigation could have taken up to two years to complete.
"The problem is we have suspended officers sitting at home on full pay and we as a council need to move forward with our management restructuring.
"With the costs forecast to escalate to more than £1m it was a pragmatic decision and I believe it was the right one to make."
Mr Coleman was suspend from work in June along with two other senior officers as the council launched an internal inquiry following the report from the audit commission.
The commission's review was highly-critical about the way the director of highways and technical services, David Green, had handled the "outsourced" maintenance contract with the Colas group.
Auditors said Mr Green, who has been suspended from work since March, had "probably breached" European procurement rules by meeting with a Colas manager during a process when several private sector companies - along with the council's own Direct Labour Organisation - were bidding against each other for the multi-million pound contract.
The inquiry also found councillors had not been kept informed of increasing problems as the contract ran its course nor was their approval sought for £1.4m of extra spending which became necessary as the highway maintenance works progressed.
On the day the auditor's report was published, Frank Field said it had exposed "astonishing basic failings" in the council's governance.
The investigation led to the suspensions of Mr Coleman along with the director of law, HR and asset management, Bill Norman, and deputy director of finance David Taylor-Smith.