The outgoing BBC director general, who resigned on Saturday over the continued controversy surrounding Newsnight, will reportedly receive around £450,000 ($715,393) in monthly instalments between now and the end of 2013.
"The BBC reached a consensual termination agreement with George Entwistle [on Saturday] and agreed to pay him 12 months pay, in lieu of notice," read a statement from the BBC Trust.
"This reflects the fact that he will continue to help on BBC business, most specifically the two ongoing inquiries [into the Jimmy Savile affair]."
Entwistle, who has worked at the BBC for 23 years, could receive over £1.3 million ($2.07 million) once his pension is taken into account. However, the settlement has been criticised by MPs.
John Whittingdale, Conservative MP for Maldon and chair of the culture, media and sport select committee, told The Sunday Telegraph: "I think almost everybody hearing this news will say, 'How can somebody who has had to leave in these circumstances, as a result of a serious failure, nevertheless get a whole year's salary?'"
"He has not had time to make an impact and to get that amount of money is ridiculous," added Gerry Sutcliffe, the Labour MP for Bradford South who sits on the same select committee.
Labour deputy leader Harriet Harman told BBC News: "It is not justifiable for the BBC to pay double the contractually required sum to the director general on his resignation. It looks like a reward for failure.
"George Entwistle should decline to accept any more than is required under his contract. This is not the way to restore public confidence in the BBC."
Tim Davie will serve as acting director general while a permanent replacement is sought.