Zayn Malik has been dropped from Simon Cowell's record label.
The music mogul had the first option to release the former One Direction singer's debut solo album through his Syco imprint, but wants to maintain his loyalty to the band, who he put together on 'The X Factor' in 2010.
A source said: "It's a big move for Simon because Zayn could have a very successful solo career but his priority absolutely remains the band and this is a big statement on his part."
Instead, Zayn - who quit the 'Little Things' group in March - will move to another label within Sony and insiders claim all parties are happy with the change.
A source told The Sun newspaper: "Simon has set up a deal that suits Zayn and One Direction.
"Zayn will stay in the Sony family under a different label and it's totally with Simon Cowell's blessing.
"It was just felt to be a bit difficult to have 1D and Zayn on the same label -- and everyone felt it was better for him to be somewhere different.
"Since leaving the band, Zayn has changed management and lawyers so it would kind of make sense for him to work with a new label team."
The 22-year-old singer bears no animosity to his former boss, and is technically still signed to Syco while he works out a new deal.
The source added: "But having said that, he still gets on great with Simon.
"And his girlfriend Perrie Edwards is having huge success with Little Mix with Syco.
"At the moment, while things are being finalised, Zayn is still signed to Syco."