Keegan left Newcastle only eight months of his second spell in charge at the club, following a row with club owner Mike Ashley and former executive director Dennis Wise.
In a statement on the League Managers Association’s official website: Keegan said: “I am delighted that the Premier League Manager’s Arbitration Tribunal has today formally announced that it has upheld my claim for wrongful dismissal against Newcastle United football club.”
“I took the decision to resign in September 2008 only after very careful and anxious consideration,” he continued.
“The decision to resign was one of the most difficult that I have ever had to take in my life. I believe that anybody who knows me and my attachment to Newcastle United and the North East in general will understand how difficult this must have been. I very much hope that the decision of the Tribunal now confirms why I felt that I had no option but to resign from the position as manager of the club that I love.
“The Tribunal has found the conduct of the club in forcing a player on me against my wishes represented a fundamental breach of my contract of employment. I do not believe that there is any manager in football who could have remained at the club in the light of their conduct.
“Since my departure there have been many untrue stories written about my resignation, my time at the club and these proceedings. I do not blame the press for this. I know that the journalists concerned are only doing their job, but I hope that the Tribunal’s decision will now conclusively put to rest a number of allegations made against me.
“In particular I believe that the Tribunal’s decision makes it clear that I did have the final say on transfers and the Club’s allegation that I did not, which was publicised widely at the time of my resignation and subsequently, was simply untrue.
“The club admitted to the Tribunal that it repeatedly and intentionally misled the press, public and the fans of Newcastle United.
“I resigned because I was being asked to sanction the signing of a player in order to ‘do a favour’ for two South American agents. No one at the club had seen this player play and I was asked to sign him on the basis of some clips on You Tube.
“This is something that I was not prepared to be associated with in any way. The club knew that I objected strongly to this transfer and were aware that by continuing with it I was likely to feel that I had no option but to resign. Notwithstanding this they nevertheless went on to sign the player at very substantial cost to the club.”
Keegan added: “Contrary to the public statements made by the club at the time they did not do all that they could to retain me at the club. In particular they refused to acknowledge that I was entitled to the final say on transfers. This left me in a totally untenable position.
“A number of the allegations made against me by the club at the hearing, in order to support their £2million claim against me, were totally without foundation and should never have been raised in the proceedings.
“I very much regret that this claim ever had to go to the hearing as it did. I want to state categorically that the allegation that has been made in the press that I turned down an offer of £4million to settle the claim is simply untrue. No such offer was made to me.
“I also want to confirm that a central purpose of my claim has always been to clear my name and restore my reputation. I consider it of vital importance that I was able to let people know about the full circumstances of my resignation and the way in which I had been treated by the club. I hope that this purpose has now been achieved.
“There are a number of technical issues that still need to be resolved by the Tribunal and I obviously will not be in a position to comment on them until after those issues have been resolved.”