A three-person panel investigating Associate Chief Justice Lori Douglas approved a settlement between the judge and the Canadian Judicial Council Monday.
Under the agreement, Douglas will retire in May and hearings into her conduct will be dropped. The judicial council said pursuing the matter after Douglas retires would not be in the public interest.
A hearing into the case was to start Monday, but lawyer Sheila Block told the panel her client reached an agreement with the judicial council. Four years of having her personal life scrutinized has taken its toll on Douglas, Block said.
"Even though she loved being a judge, considered it an honour and privilege to serve, she is at the point where this is the best choice for her, for her son and elderly father, for her late husband's children and the rest of her family," Block said.
"To withstand more weeks of hearing into entirely private matters and risk the viewing of her intimate images by colleagues and others, is more than she can bear."
Douglas has also asked that the intimate photos of her taken by her husband be returned to her so they can be destroyed.
Chief Justice Francois Rolland, chairman of the panel, said members agreed it was "academic" and "not appropriate to pursue this matter" given Douglas's early retirement.
Although the judicial council and Douglas drafted a public statement on the settlement, Rolland said Douglas can't speak publicly until she is formally retired in May, 2015.
"She has accepted the imposition of silence throughout these four years even though it has been extremely difficult," Block told the hearing. "If it is a condition that she is quiet until May 2015, so be it."
Block declined to comment after the hearing and said the public statement wouldn't be released citing the panel's ban.
The disciplinary panel was examining whether the photos were "inherently contrary to the image and concept of integrity" of the judiciary and whether they undermined public confidence in the justice system.
The panel was also looking into whether Douglas disclosed the existence of the photos before she was appointed to the bench in 2005.
Douglas, who has been on paid leave since 2010 and is in her late fifties, will be eligible for early retirement next year after sitting on the bench for 10 years.
According to legislation, she will be eligible to draw a pension of at least half her $315,000 annual salary.
The decision to stay the proceedings brings an end to a tumultuous, controversial and expensive process which the judicial council estimates has cost at least $3 million, not including Douglas's salary.
Douglas's late husband, lawyer Jack King, posted the intimate photos of his wife online over a decade ago and showed them to a client, Alexander Chapman, to try to entice him to have sex with her. Chapman later alleged the behaviour was sexual harassment.
He was paid $25,000 to destroy the photos and drop the complaint. But he held on to copies and made them public in 2010.
Douglas and King always said Douglas had no part in King's actions, which King later described as "bizarre, ridiculous, stupid, self-indulgent, grotesque." King died of cancer last spring and Douglas has been on paid leave since 2010.
"She has been devastated by the death of her mother and her husband during this period," Block said.
A previous panel that was investigating Douglas only heard a few days of testimony and got bogged down in technical arguments. Its members resigned en masse following allegations that the proceeding was biased against Douglas and three new panellists were appointed.
Douglas recently lost a bid to keep the new panel from viewing the nude photos, prompting her lawyer to apply to the Federal Court for an injunction, which was granted.
Under the settlement, Block said Douglas will not pursue any further court action once she is retired and "no further funds or judicial resources will be expended in the meantime."
Independent counsel Suzanne Cote said it would have likely taken months for the case to make its way through the Federal Court and the judicial council doesn't think carrying on with a hearing in light of Douglas's voluntary retirement is in the public interest.
But she suggested the photos would only be returned to Douglas once she retires in May.
Note to readers: This is a corrected story. A previous version said Douglas turns 55 next year.