Bethania Group was criticized in a provincial audit last year, which found Ray Koop was allowed to retire, start collecting his pension and get rehired the very next day.
The audit also found Koop was given a pre-retirement payout worth half his $160,000 annual salary.
In March, the Manitoba government ordered Bethania Group to end the CEO's contract and recoup the money, but the company's board of directors balked.
Health Minister Theresa Oswald says an independent review has been completed and Bethania's board has agreed to comply with all its recommendations.
She says that includes cancelling the former CEO's contract and recouping his payout in full.