Spansion will receive $70m from Samsung as part of a settlement of their long-running patent lawsuits.
The two companies have also struck a cross-licensing deal related to their respective flash memory technologies.
The resolution of the dispute is good news for Spansion which filed for Chapter 11 bankruptcy protection last month.
See: Spansion files for bankruptcy in the US
"The agreement strengthens our cash position to help Spansion emerge from the Chapter 11 process a stronger and more focused company," said John Kispert, Spansion president and CEO.
Due to Spansion's recent Chapter 11 filing, the agreement is subject to approval by the bankruptcy court.
The agreement is contingent upon the dismissal of the claims and the satisfaction of certain conditions including bankruptcy court approval.
Spansion filed two separate patent infringement complaints against Samsung last November.
In January 2009, Samsung filed a patent infringement complaint in Japan against Spansion Japan seeking both injunctive relief and damages for based upon Japanese patents owned by Samsung.
Each of these actions is to be dismissed pursuant to the settlement agreement with neither side admitting liability.