NBC: Conan O’Brien Released From His Contract, Last ‘Tonight Show’ Friday

Conan O’Brien’s late night drama has come to close.

“NBC and Conan O’Brien have reached a resolution of the issues surrounding O’Brien’s contract to host the ‘Tonight Show with Conan O’Brien,’” NBC and Conan said in a joint statement to Access Hollywood on Thursday. “Under terms of an agreement that was signed earlier today, NBC and O’Brien will settle their contractual obligations and the network will release O’Brien from his contract, freeing him to pursue other opportunities after September 1, 2010.”

The statement added that Conan’s final “Tonight Show,” as rumored, will be on Friday, January 22. Will Ferrell – who was the comedian’s first “Tonight Show” guest – will join him on the couch, as will Tom Hanks.

In an announcement on NBC’s the “Today” show, the network announced Conan would be receiving more than $33 million to exit his contract, with another $12 million going toward the severance of his staff – many of whom moved from New York to Los Angeles with their boss last year when Conan left “Late Night with Conan O’Brien.”

Access has learned that repeats of Conan-hosted “Tonight Show” episodes will air following his departure until Jay Leno returns to his hosting duties. As previously reported, Jay will be back on March 1.

It has been a tense few weeks in late night since news broke that NBC would be canning “The Jay Leno Show,” which struggled in the ratings at 10 PM and left NBC affiliates unhappy with the lead-ins for their 11 PM news broadcasts. Jay’s initial shift to the earlier hour had followed his retirement from “The Tonight Show” in spring 2009 due to a long-planned hand-off to Conan negotiated in 2004.

As previously reported by AccessHollywood.com, Jay was subsequently returned to his old timeslot of 11:35 PM, with Conan given the option to move “The Tonight Show” to 12:05 AM.

But Conan released a statement declaring that moving “The Tonight Show” into the next day would “seriously damage what I consider to be the greatest franchise in the history of broadcasting” and refused to accept the move.

This led to negotiations for his exit, with heated words reaching the press from both sides – and especially from other late night hosts. ABC’s Jimmy Kimmel spent a night of “Jimmy Kimmel Live” in costume and character as Jay Leno, and appeared on Jay’s “10@10” segment to poke fun at the comedian; meanwhile, CBS’s David Letterman took the opportunity to reminisce on his own difficulties with NBC when Jay took over “The Tonight Show” instead of himself.

Even Hollywood stars commented on the drama, with Julia Roberts telling Access Hollywood’s Billy Bush at the Golden Globe Awards on Sunday, “NBC, you’re in the toilet right now.”

Now, Conan’s television future remains up in the air. The star may return to TV as soon as September, but while FOX sources have shown interest, the network currently airs syndication re-runs in the 11 PM hour and is not known for its late night successes. Conan does have a relationship with the network – before starting at “Late Night” in 1993, he had written for FOX’s “The Simpsons.”