Lawyers for Bill Spedding, a Mid-North Coast repairman and one-time person of interest in the disappearance of William Tyrrell, say they will sue NSW Police over his treatment and damage to his reputation.
Mr Spedding visited William's foster grandmother's Kendall home three days before William's September 12, 2014 disappearance to fix a washing machine but has always strongly denied involvement.
Police in January 2015 searched Mr Spedding's Bonny Hills home and drained his septic tank, but found no evidence linking Mr Spedding to William.
Mr Spedding's lawyer Peter O'Brien on Friday confirmed to AAP legal action would be taken against police on the grounds of malicious prosecution, misfeasance in public office and collateral abuse of process.
The claim is set to be filed next week.
An inquest on Monday into William's disappearance heard Mr Spedding and his wife met for coffee about 9.30am in Laurieton, a 15-minute drive from Kendall, on the day William went missing. They then attended a school assembly across the road to see a child in their care receive an award.
William went missing in Kendall about 10.15am.
Mr Spedding this week said the intense police and media scrutiny he has endured has had a devastating effect on him and his family.
No person has ever been charged over William's disappearance.
Australian Associated Press