The school board approved the move 6-to-3 despite opposition from some in the community.
"This disagreement spits in the face of the two victims that had the courage to come forward and will discourage others that are out there,” says Darren Stridiron, of the Newburgh Board of Education.
Public comment was not heard after 45 minutes the agreement passed.
Newburgh's attorney said the findings against Padilla are “inconsistent,” despite leaked documents stating the investigation allegedly found he broke federal laws and district policy.
Orange County District Attorney Dave Hoovler announced that his office is investigating the allegations and payout for possible wrongdoing.
A hearing was never held to determine if Padilla is guilty or not, and despite the controversy, the district says the agreement is in everyone's best interests.
Under the deal, Padilla will be paid his salary with benefits while technically on leave for the next two years, for a total payout of $678,000.