The accord resolves claims that 85 seconds, or one-third, of New Slaves, which appeared on the No. 1 album Yeezus, was a copy of the plaintiff Gabor Presser's 1969 song Gyongyhaju Lany, which translates roughly as Pearls in Her Hair.
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"I am very glad it is over," Presser was quoted as saying by Hungarian news agency MTI on Friday.
Terms of the settlement were not disclosed.
Lawyers for West and co-defendant Sony Corp's Sony/ATV Music Publishing LLC did not immediately respond to requests for comment.
The parties settled on Monday, two days before West was scheduled for a deposition. A notice that they agreed to dismiss the case was made public on Thursday in Manhattan federal court.
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"The matter has been resolved amicably," Peter Cane, a lawyer for Presser, said on Friday.
Presser had sought at least $2.5 million of damages for copyright infringement, calling his song "one of the most beloved pop songs ever in Hungary and across Eastern Europe."
He said he did not know the song was used until West's lawyers gave him 24 hours to "work out a deal" and then sent him a $10,000 check, which he never cashed.
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A lyricist, Anna Adamis, was also a plaintiff.
Recording stars are often sued in the United States for song theft, as in a case filed last month against U2 in the Manhattan court. Few such cases go to trial, and many are resolved out of court.
The case is Presser et al v West et al, US District Court, Southern District of New York, No. 16-03798.
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