Follow CBSDFW.COM: Facebook | Twitter

FRISCO (CBSDFW.COM) – One week after hundreds of students walked out of class in protest, and six days after filing a grievance, Frisco Independent School District officials released a statement saying that a “resolution” has been reached with principal Sylvia Palacios.

READ MORE: Church Offering $5K Reward For Safe Return Of Missing Fort Worth Girl Dashayla Wolfe

After seven years as principal at Frisco High School, Palacios was being reassigned to the district’s alternative school. It was a move many students, parents and teachers said was punishment for the principal standing up to a group of parents who had sought preferential treatment for their children — and didn’t receive it.

The district had 10 business days to respond to the formal grievance. Tuesday morning the district released a statement that said, in part, that Palacios:

“…has withdrawn her grievance against Frisco ISD. In accordance with the settlement agreed upon by both parties, Mrs. Palacios will not be returning to Frisco High School. She will remain on paid administrative leave and retire effective at the end of her 2015-2016 contract.”

On June 2, hundreds of students from Frisco High, and others from different schools, walked out of class and marched more than two miles from the campus to the school district administration building. Carrying banners saying “Save Sylvia” and chanting, “you can’t hear us,” and “we want answers,” the group rallied outside the building for more than half an hour. Their actions were in response to a letter sent to parents earlier that week announcing Palacios’ reassignment.

The students had demanded that Palacios be allowed to come back to Frisco High School next year.

One day before the march teacher Mary Autrey said, “We learned more of the truth of why this was happening, because of her not letting a parent bully her into making the decision that they wanted for their one student.”

READ MORE: Dallas City Council Hires Outside Law Firm To Conduct Independent Investigation Into Major Data Loss

On Tuesday, outgoing senior class president, Lexi Murphy said, “I feel like she had to do what she had to do for herself.  That gives me peace of mind.  I wish her all the best of luck and thank her for all the love and appreciation that she’s shown me.”

Incoming senior, Mackenzie Rutledge said, “I’m going to be sad that because she’s been my principal since freshman year and I’m not going to be able to shake her hand at graduation.”

“I just think she handled the situation with grace and I think that says a lot about her character,” Rutledge added.

In the now-withdrawn grievance, Palacios had claimed she was “blindsided” when, after receiving outstanding performance evaluations at Frisco High, she was prompted to transfer to the Frisco ISD alternative school and accept a demotion to Associate Principal. Palacios had also stated she was never given a reason for the demotion.

Superintendent Jeremy Lyon insisted the move was not a demotion, and said Palacios would have still received her same salary.

On June 5, during the Frisco High School class of 2015 graduation, Palacios received a standing ovation when she addressed students.

After 38 years in education Palacios will now retire. The Frisco ISD statement closed saying:

“She now looks forward to spending time with her family and friends and having time to travel.
Frisco ISD wishes her well and thanks her for her years of service to Frisco High School and Frisco ISD.”

MORE NEWS: Doctor Accused Of Hoarding Dead Kittens In Her Freezer

(©2015 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)