Mike Love had argued he was the only person allowed to perform under the name of the band.
He sued Al Jardine, whom he claimed was appearing as an unlicensed The Beach Boys act, and had demanded $1m (£504,000) in earnings plus double that sum in costs.
A trial was due to begin next month but Jardine‘s lawyer Lawrence Noble said “a friendly settlement” had been reached.
He said : “Mr Jardine feels very happy and feels that this is a friendly settlement that allows them to focus on the talent and future of this American iconic band.”
The agreement was reached at the end of two days of Superior Court discussions in Los Angeles .
No details of the settlement were disclosed, reports BBC.