Tesco has confirmed that it has agreed to pay former CEO Philip Clarke and chief financial officer Laurie McIlwee around £1m each of pay that was suspended amid last year's accounting scandal.
Both men left the company late last year.
The supermarket giant said in a statement that it has agreed to pay the liquidated damages contractually due to Clarke, who will receive £1.2m (€1.6m, $1.8m) and and McIlwee, who will get£970,880.
The group had previously reiterated that the payment suspensions of the executives were not "disciplinary or an admission of guilt".
"At the time of the company's last interim results, it was noted that the payments were suspended given the investigation into the issues regarding the accounting for commercial income," added Tesco in a statement on 3 February.
"The company is contractually committed to make the relevant Payment to each former director unless it can legally establish a case of gross misconduct against him. The company has taken legal advice and has concluded that it does not have the basis for continuing to withhold the payments.
"Accordingly, the board considers that defending costly claims for the payments would not be in the company's best interests."
Tesco still faces another Serious Fraud Office (SFO) investigation into how the group overstated profits. The scandal knocked billions off Tesco's market value.
"The SFO continues to investigate the commercial income issue," said Tesco in the statement.
"If new information were to come to light which would change this assessment, the Company will pursue recovery of the payments and damages and has fully reserved all its legal rights in this respect."
According to Kantar Worldpanel, the market researchers, Tesco has now lost more of its market share - down by 2.7% in the 12 weeks leading to 7 December.
Reports also emerged last year that a whistleblower had notified the group about concerns over its profit declarations, but was "ignored for months".
Newly installed Tesco boss Dave Lewis, who took over from Clarke in September last year, has since overhauled the management structure of the British retailer, leading to suspensions and dismissals among its top executives.