Floyd filed a grievance against the Vikings in early November for the payment of the $6.7 million option in his contract for 2017, which Minnesota exercised in 2016, per SI.com's Albert Breer.
The Vikes placed Floyd on the non-football injury list after a knee procedure administered by orthopedic surgeon Dr. James Andrews allegedly resulted in permanent nerve and muscle damage in Floyd's right leg.
In addition to the grievance, Floyd filed a $180 million lawsuit against Andrews and the Andrews Institute for Orthopedic Surgery.
According to Breer, Floyd was told that he was to undergo minor arthroscopic knee surgery in 2016 that was supposed to keep him out for 3-4 weeks.
Floyd alleged that he instead underwent a more serious procedure and that he was administered a pain blocker that resulted in muscle and nerve damage.
The 26-year-old appeared in one game in 2016, but he hasn't played since, and his football career is now over due to his injuries.
Minnesota selected Floyd with the No. 23 overall pick in the first round of the 2013 NFL draft out of the University of Florida.
Floyd appeared in 44 career NFL regular-season games and made 24 starts. Over four seasons, he registered 95 tackles and 9.5 sacks, including a career-high 4.5 sacks in 2014.
Goessling noted that as a result of the grievance being dropped, the Vikings now have $4.235 million in salary cap space.