The national federation said it had opted to end the legal bout.
“SSA will rather allocate the funds, which are needed to litigate further in this matter, towards its athletes and furthering the sport as a whole,” the swimming body said in a statement.
“Consequently and notwithstanding the actions by Mr Gerhard Zandberg, SSA has withdrawn its findings and sanctions against Mr Zandberg.”
However, Zandberg’s lawyer Karen van Eck said they were still in discussions.
“They have made an offer, which we received this morning,” Van Eck said yesterday.
“But I have not had a chance to discuss it with my client, so I don’t have instructions from him yet.
“It’s very premature for them to be issuing a statement.”
Zandberg, 31, was suspended and fined after switching rooms and spending the night with his girlfriend without permission at last year’s World Swimming Championships in Barcelona.
His disciplinary was held shortly before his semifinal in the men’s 50m backstroke event, and he bombed out in the penultimate round, slipping on the wall as he failed to step on the podium for the first time in six years at the biennial aquatics spectacle.
Following his appeal hearing in October, his sentence was suspended, but Zandberg took the matter to the High Court.