Sao Paulo have announced on their official website that they have released Oscar, who is now free to officially join Internacional.
The 20-year-old midfielder had been embroiled in a legal battle with the Sao Paulo giants since reneging on his contract in 2009 after a dispute over unpaid wages.
He then joined the Porto Alegre club, only for a labour court to order the player to return to Sao Paulo in March after ruling that his actions were in breach of his contract.
However, Oscar refused to return to Tricolor Paulista, and his stance was empowered by a second court ruling in April, which stated that the midfielder could not be forced to play for Emerson Leao's side.
The Brazil international has now reached an agreement with his original employers to terminate his contract, but only after coughing up compensation in the region of €6 million.