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The album, which was originally scheduled for release earlier this summer, hit a series of delays and was ultimately rejected by Reprise (part of the Time-Warner-AOL media giant).
The label reportedly wanted the band to re-record a more commercial version of "Yankee Hotel Foxtrot." The band refused, and a stand-off ensued.
Band leader Jeff Tweedy told The Chicago Tribune's Greg Kot that he was elated by the divorce from Reprise, and was fielding offers from 30 different labels to release "Yankee Hotel Foxtrot" as is.
"It feels like Christmas. I don't feel victimized, I feel liberated," Tweedy told The Tribune.
Wilco will now release the album some time before the end of the year, and will push ahead with plans for a U.S. tour in September.
"It's embarrassing to see how many offers we've gotten in the last few weeks.
It's exciting, and it makes me feel we can do something unprecedented without compromising our music," Tweedy told The Tribune.
"Now I believe our efforts to be self-sufficient are completely realizable."
Under the deal, Wilco was allowed to opt out of their contract, which called for them to deliver several more albums to Reprise, and to buy back the master tape for the new album. Tweedy was to arrive in New York today to begin mulling through the offers, the report said.
Tweedy signed to Reprise seven years ago after the dissolution of the influential roots-rock outfit Uncle Tupelo. With Wilco, Tweedy had masterminded a series of albums (1995's "A.M.," 1996's "Being There", and 1999's "Summerteeth") which gradually moved away from Uncle Tupelo's alt-country sound and were both more experimental and more melodic.
The group also collaborated with Billy Bragg on two albums built upon unfinished songs by Woody Guthrie.
Tweedy told The Tribune that when the band handed in "Yankee Hotel Foxtrot" in June, the label's head of A&R, Mio Vukovic, asked the band to change the album.
"He told us more things needed to be done for it to be finished, and we said, 'This is it. We're done with this record and we're happy with it'," Tweedy told the paper.
A source told The Tribune that Vukovic's boss, Warner Bros. executive vice president David Kahne, backed his A&R man's view.: "He said that the record was so bad it would kill Wilco's career."
Coincidental to Wilco's dispute with Reprise was the departure of the label's president, Howie Klein. Klein's replacement, Tom Whalley, has not left his current job at Interscope to assume his new duties, so Kahne had carriage of affairs at Reprise, the report said.
The Tribune said Wilco's past albums have been money-makers for Reprise, selling on average 112,000 to 200,000 copies in the U.S. and 500,000 worldwide.
The decision to let the band go was greeted with shock from within Warner and across the record industry. Several sources said the group was victimized by the blockbuster mentality that has seized record companies, replacing the career-building attitude that reigned in the '70s. (More on Wilco)