The Watch the Throne rappers were sued last October by Syl Johnson for using an unauthorized sample of his song 'Different Strokes'.
Johnson had claimed that West tried to get the song cleared for his solo album My Beautiful Dark Twisted Fantasy, but couldn't get the deal done in time.
The sample then appeared on the Watch The Throne album, with Johnson subsequently filing the lawsuit, according to TMZ.
However, in legal documents filed in Illinois federal court, the case was dismissed because the two sides reached a settlement. No further details were made available.
Johnson has previously sued Michael Jackson, Jefferson Airplane and Cypress Hill for copyright infringement.
Listen to Jay-Z and Kanye West's track 'The Joy' below: