However, the Northern Ireland international midfielder injured an ankle during the first month at St. Andrew's and was sent back to the London club which Blues claimed made that deal invalid.
Blues as we all know reached the Premiership that season and Wimbledon argued he was a Birmingham player.
Hughes attended an independent arbitration hearing in London with his legal team this week, where he accepted the club's settlement offer.
"A satisfactory settlement has been mutually agreed," said PFA chief executive Gordon Taylor, who acted on his behalf.
"We're satisfied."
Blues as we all know reached the Premiership that season and Wimbledon argued he was a Birmingham player.
Hughes attended an independent arbitration hearing in London with his legal team this week, where he accepted the club's settlement offer.
"A satisfactory settlement has been mutually agreed," said PFA chief executive Gordon Taylor, who acted on his behalf.
"We're satisfied."
