The rig was previously contracted to complete production wells for Chevron's Wheatstone LNG project up to May 2017.
However, Chevron has elected to use termination rights which were triggered after the cyclone-impacted rig broke from its mooring lines and drifted more than 5km from its Iago-B drilling location to float over one of the main flow lines for Pluto.
"The duration of the force majeure event and resultant repairs necessitated by the damage incurred from the cyclone have triggered termination rights in relation to which the parties have agreed to a reduction in the term of the contract by one year with contractual rates remaining unchanged," Atwood said.
"It is expected that repairs for damage sustained by the rig and required regulatory approvals will be completed by April 30, 2015."
While Chevron has not revealed the cost savings, the operating day rate has been estimated to be more than $US400,000 ($A519,000) - meaning that the cancellation would save easily more than $100 million.
The West Australian reported that Chevron also confirmed that the Wheatstone LNG upstream development remained on track despite the Osprey contract amendment.
Last week Woodside CEO Peter Coleman said the company was still assessing liabilities in terms of the Osprey-triggered Pluto disruption.
"Fortunately there was no to very minimal damage to Pluto, to the pipeline," Coleman said.
Any decision, including lodging an insurance claim or pursuing costs from the Iago well participants, is not expected for a few weeks.