The AFL has softened the trading ban imposed on the Sydney Swans, with the club allowed to recruit players at or below the current average wage of $340,000 in the 2015 trade period.

The compromise was reached after the club and the AFL Players' Association made presentations to the AFL Commission on December 15 and negotiations with the AFL executive took place in the past week.

The average wage is based on the salaries of players who have been on an AFL list for more than two years to ensure it did not include the wages of first and second year players, who are on fixed payments.

The original decision to ban the Sydney Swans from recruiting players during the 2014 and 2015 trade period was reached as part of negotiations that saw the Swans and Greater Western Sydney phase out the cost of living allowance (COLA) in the next two years.

The Sydney Swans will now be able to offer any player or a free agent a contract that is at or below the current average annual salary of players.

The decision gives the Swans the flexibility to bring in second-tier players looking for a fresh start, but temporarily limit their ability to compete for the game's big names.

The club has re-ignited the careers of several players including Rhyce Shaw, Mitch Morton, Josh Kennedy, Ben McGlynn, Marty Mattner and Ted Richards but bore the brunt of critics when it landed key forward Kurt Tippett and then shocked the industry when former Hawthorn star Lance Franklin agreed to join the club as a free agent.

AFL general counsel Andrew Dillon said that a range of options had been considered before the decision was made.

"The AFL is pleased that this outcome has been reached to the satisfaction of the club, the AFL and the AFL Players' Association," Dillon said.

Sydney Swans CEO Andrew Ireland was happy to accept the compromise although he said he still would have preferred there to be no conditions attached the club's re-entry into the trading period.

"We are pleased to be back in a position, like the 17 other clubs, to trade players and recruit free agents to our club, albeit it was our preference that there be no conditions attached to this," Ireland said.

"We thank the AFL Commission for meeting with us and allowing us the opportunity to put our view forward."

The AFLPA also presented their view to the AFL Commission as they were concerned with the narrowing of the market for player exchange. CEO Paul Marsh said the compromise was an acceptable outcome.

The Sydney Swans also landed talented youngster Isaac Heeney at pick No.18 in the 2014 NAB AFL Draft as part of the Academy bidding system, although most clubs rated him as a top five selection.

A new bidding system is expected to be in place for 2015 along with the phasing out of COLA and the possible removal of the veterans allowance as the AFL moves towards a more pure draft as part of its competitive balance strategy.