The Israeli government has agreed to pay the family of Australia-born lawyer Ben Zygier nearly $1.2 million in compensation after the so-called Prisoner X hanged himself in a prison near Tel Aviv in late 2010.

Zygier’s suicide, which made headlines after the Australian Broadcasting Corp. publicly disclosed his identity for the first time earlier this year, could have resulted in embarrassing disclosures for the Israeli government in a court case brought by Zygier’s family, according to a report by Israel’s oldest daily newspaper, Haaretz.

Israel’s justice ministry does not admit wrongdoing as part of the agreement, which absolves the country’s government of any negligence in its treatment of Zygier, a dual Israeli and Australian citizen who put his legal career on hold to join Israel’s foreign intelligence agency the Mossad.

Zygier was arrested by Israel’s internal security service Shin Bet in January 2010 for unwittingly leaking secrets that exposed two Hezbollah informants and scuttled a deal to bring home the bodies of three Israeli soldiers killed by Syrian forces in Lebanon during the early 1980s. The three soldiers were captured alive but are now presumed dead. One of them, Zachary Baumel, was a U.S. citizen.

Facing a 10-year sentence for treason, Zygier was held in an isolation cell in maximum-security Ayalon Prison, where he was found dead in December 2010. While no criminal charges have been brought as a result of Zygier’s death—the Israeli government claims it lacks the evidence to bring such a case—the country’s justice ministry released a statement explaining its decision to settle the civil matter.

“The reason the state agreed to pay this sum stemmed from its desire to avoid a court hearing in which details that could harm national security might be revealed,” said the statement from Israel’s justice ministry, which is headed by Tzipi Livni.

The $1.2 million now owed to Zygier’s family will be paid out over four years, according to Haaretz. Israel is reportedly holding another top-secret prisoner in one of its facilities.

The Am Law Daily touched on Zygier’s transition from lawyer to spy last month in a story about Cravath, Swaine & Moore’s role advising longtime client IBM on its $1 billion acquisition of fraud protection and security software provider Trusteer. (The Tel Aviv- and Boston-based target company is active in the cybersecurity space.)

Born in suburban Melbourne, Zygier trained as a lawyer a decade ago at leading Australian firm Deacons, which was later absorbed into what is now Norton Rose Fulbright. (The Hong Kong office affiliated with Deacons, which has the same name, has remained independent.)

Zygier left Melbourne for Tel Aviv in 2003, where he began working at Herzog Fox & Neeman, a leading Israeli firm he joined mostly as a prelude to the Mossad’s formal application process, according to an in-depth report earlier this year by German weekly news magazine Der Spiegel on the ill-fated spy’s career path.

Herzog Fox did not immediately respond to a request for comment by The Am Law Daily about Zygier’s time at the firm, nor did Boaz Ben Zur, a founding partner of Tel Aviv’s Boaz Ben Zur & Co. and attorney for Zygier’s family.

By 2005, Zygier was working full-time for the Mossad, which sent him to southern Europe to clandestinely work for companies doing business with Iran. But Zygier grew bored with the work, according to Der Spiegel, and his lackluster performance soon had him working a desk job back in Tel Aviv.

Eager to get back into the field, Zygier reportedly sought on his own to cultivate sources within Hezbollah, one of whom Der Spiegel and ABC report was allegedly a double agent who exploited the young spy’s ambition.

Haaretz reports that an Israeli judicial inquiry found that prison guards didn’t properly check Zygier’s cell and that at least one closed-circuit television camera monitoring his activities was not working at the time of his death. The report found that Zygier had previously tried to kill himself two other times, and had met with prison psychiatrists and social workers on numerous occasions.

The results of a probe into the circumstances surrounding Zygier's death by Israel's parliament and leaked to Haaretz in June also faulted the Mossad for its "severe systematic failure" in the recruitment and handling of Zygier.

Zygier is buried in Melbourne. He was 34.