The long-serving executive chairman announced his departure after the retailer was slapped with a £4.3 million fine for sharing commercially sensitive information with Footasylum, the rival it was seeking to buy for £90 million.
JD said on Wednesday that it has reached a deal with Mr Cowgill regarding his departure from the business.
Peter has hugely valuable experience built over 18 years which we do not want to lose and both Regis (Schultz) and I are delighted to be able to benefit from his considerable talent and advice
Andy Higginson, JD's chair
The former boss will take home £3.5 million over two years as part of an exit agreement preventing him from taking a new job at a competitor company or advising similar brands.
He will also receive £2 million for giving his support and insight to the new chief executive, former B&Q executive Regis Schultz, and chairman, Andy Higginson, over an agreed three-year consultancy period.
Mr Cowgill will be expected to provide “ongoing access to his unparalleled knowledge and experience” in leading JD as part of the exit deal, the firm said.
The businessman has also been paid his salary and contractual benefits and will be eligible for an annual bonus on a pro rata basis up to May 25.
Andy Higginson said: “Peter has hugely valuable experience built over 18 years which we do not want to lose and both Regis and I are delighted to be able to benefit from his considerable talent and advice.
“This caps off what, by any measure, has been a remarkable period of executive leadership by Peter who has been such a core part of the business’s incredible success story to date.
“We are pleased to have settled the terms of his departure and more importantly, to have secured a seamless handover and access to his decades of experience, whilst best protecting our commercial interests.”
In August, JD took a £50 million loss in selling Footasylum after being ordered to offload the brand by the UK’s competition watchdog.
JD is listed on the FTSE 100 and has a market valuation of more than £12 billion.