United sacked Moyes on Tuesday when the Scot was just 10 months into his six-year contract.
Since then, the club have been in talks with Moyes and LMA representatives regarding compensation.
On Friday, the LMA released a statement saying terms had been agreed.
"The League Managers Association and Manchester United are pleased to confirm that terms of settlement have been agreed between the Club and David Moyes in respect of the termination of his employment," the statement read.
"A settlement agreement is in the process of being finalised. No further comment will be made in relation to this issue."
There was no indication how much money Moyes had received as part of the severance deal.
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