The surprise merger between the US PGA Tour, the European Tour and the Saudi-backed rebel circuit LIV Golf was announced overnight.

The peace deal between the rival organisations means the golf war launched when Saudi-backed LIV Golf challenged the established tours is over.

The PGA Tour and the European tour have agreed to a merger with Saudi Arabian golf interests, creating a commercial operation designed to unify professional golf around the world.

As part of the deal, the sides are dropping all lawsuits involving LIV Golf against each other effective immediately.

Still to be determined is how players like Australia’s British Open champion Cam Smith and recent US PGA winner Brooks Koepka, who defected to Saudi-funded LIV Golf for nine-figure bonuses, can rejoin the PGA Tour.

LIV Golf League events planned for this year will continue but it is unclear what form the circuit will take in 2024.

In April, Adelaide’s Grange Golf Club hosted the first LIV Golf event in Australia after a controversial state government-backed bid to host the Saudi-backed tourmanet in Adelaide.

Premier Peter Malinauskas said he did not expect the event to move away from Adelaide.

“I think it’s potentially all upside for Adelaide and South Australia,” Malinauskas told ABC Radio Adelaide this morning.

“We naturally went out on a limb and provided LIV Golf their breakthrough moment globally which has undoubtedly only accelerated the reconciliation that has occurred between the US PGA and LIV Golf.

“So, we’re well positioned to make sure that LIV Golf going forward isn’t just in Adelaide but is actually in Adelaide in an even bigger and better format than what was the case previously.

“We were pretty bullish about next year but this only elevates a degree of expectations from our part.”

Patrick Reed does a shoey to celebrate victory during LIV Golf Adelaide. AAP/Matt Turner

Malinauskas said the state government had a contract with LIV Golf to host its event in Adelaide for the next three years.

He indicated there was no signal that this would change other than a potential “change in the format”.

“This morning, I’ve been in touch with LIV Golf and they’re saying they’re already gearing up for what they’re doing in Adelaide next year,” he said.

“They’ve got a contractual obligation to hold the next three events in Adelaide, so it’s only good news.”

PGA Commissioner Jay Monahan said in a memo to players that a thorough evaluation would determine how to integrate team golf into the game.

The agreement combines Saudi’s Public Investment Fund’s golf-related commercial businesses and rights — including LIV Golf — with those of the PGA and European tours.

“They were going down their path, we were going down ours, and after a lot of introspection you realise all this tension in the game is not a good thing,” Monahan told The Associated Press.

“We have a responsibility to our tour and to the game, and we felt like the time was right to have that conversation.”

Yasir Al-Rumayyan, the governor of Saudi Arabia’s sovereign wealth fund, will join the board of the PGA Tour, and be chairman of the new commercial group, with Monahan as the CEO and the PGA Tour having a majority stake.

LIV Golf CEO, Australian golfing great Greg Norman, was not in on the deal. He found out from Al-Rumayyan shortly before the news went public.

PIF will have exclusive rights for further investments and a right of first refusal on any new capital injected into the entity.

Monahan, who said the decision came together over the last seven weeks, is headed to the Canadian Open in Toronto to meet the players, some of whom are unhappy at the way the news broke.

“I love finding out morning news on Twitter,” wrote two-times major champion Collin Morikawa.

Majed Al-Sorour, CEO of Golf Saudi (right) with LIV Golf CEO Greg Norman. Photo: AP/Lynne Sladky

Canadian world No.67 Mackenzie Hughes wrote: “Nothing like finding out through Twitter that we’re merging with a tour that we said we’d never do that with.”

“Safe to say we’re all pretty surprised out here,” PGA Tour winner Brendon Todd told Golf Channel.

“I need more details to figure out if this is gonna be positive or negative. Any time you’re taking money from the Saudi Public Investment Fund, that’s probably a difficult decision to make.

“I think for us out here on the PGA Tour that were loyal and stuck with it, I think we’re probably anxious and a little frustrated to hear that potentially some of the LIV players could come back to our tour. It doesn’t quite seem fair to a lot of us, I’m sure.”

“Awesome day today,” tweeted Phil Mickelson, one of LIV Golf’s first and most high-profile defectors.

But Golf legend Jack Nicklaus has lent his support to the surprise merger of the PGA and LIV tours, describing the groups’ rapprochement as good for the game.

Nicklaus, winner of 18 majors, told The Palm Beach Post the linking of the previously warring organisations is “good for the game of golf”.

His comments came days after saying he no longer considered LIV players “part of the game”.

But Tuesday was a new day for the sport and its direction of travel.

“The last three years have been difficult for the game and the players,” Nicklaus told the Post.

“I spoke with PGA Tour commissioner Jay Monahan this morning. He seemed pleased with the arrangement that will once again bring together the best players in the world.

Former US President Donald Trump, who owns three courses that are part of LIV Golf’s 14-event schedule in 2023, celebrated the deal in a Truth social post using all caps.

But Amnesty International was less impressed.

“While this may have taken some golf fans and commentators by surprise, it’s really just more evidence of the onward march of Saudi sportswashing,” Felix Jakens, their UK’s head of priority campaigns and individuals at risk said.

“It’s vital that this latest surge in Saudi sportswashing isn’t allowed to obscure the increasingly dire human rights situation in Saudi Arabia.”

-InDaily staff writers and AAP with agencies