The dispute began in 2020 when Senegal international Gueye signed a pre-contract at Watford before the end of his deal at Ligue 2 club Le Havre.

According to French media reports, Gueye then changed his agent, who recommended he pull out of the deal.

Instead, the French-born midfielder signed a four-year contract at Marseille in July 2020. He has since made 100 appearances in all competitions for the club.

In January 2022, FIFA suspended Gueye from competing in official matches for four months, while Marseille were handed a one-year transfer ban for inducing the player to breach his contract.

Later that month, CAS suspended FIFA's ruling, but on Thursday sport's highest court announced that it had upheld the soccer governing body's decision "with the exception of the transfer ban imposed on OM, which is set aside".

"... the panel reached the same conclusion as the FIFA DRC in determining that the player had indeed terminated his contract with Watford FC without just cause...," a CAS statement added.

"However, the CAS Panel determined that OM had in fact rebutted the presumption of inducement and annulled the disciplinary sanction imposed on OM."

CAS added that Marseille will need to pay Watford 2.3 million pounds ($2.95 million) in compensation.

Marseille finished third in Ligue 1 behind champions Paris Saint Germain and RC Lens.