City said they accepted that the current APT rules, which regulate commercial deals between clubs and companies linked to their owners if deemed over fair market value, are "valid and binding", with both parties agreeing to terminate legal proceedings.
The case is separate from the charges City are facing over alleged breaches of financial rules.
"This settlement brings an end to the dispute between the parties regarding the APT Rules. As part of the settlement, Manchester City accepts that the current APT Rules are valid and binding," City said in a statement.
The current APT rules were adopted in November after the majority of the English top-flight clubs voted in favour of some amendments to the previous rules, which were also challenged by City.
An independent tribunal ruled in February that aspects of the league's APT rules "were found to be unlawful." In response, the Premier League said the tribunal's ruling did not affect the "valid operation" of its current APT rules.
