"This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together," a joint statement by the companies said, without offering details. (Agencies)
The suit dates back to 2007 when Viacom accused the Google-owned video-sharing division of using pirated video clips to attract viewers.
It is among several similar lawsuits against Google, which in recent years has stepped up efforts to protect copyrights.
The Viacom copyright case was closely watched at the time, as film and television studios grappled with adapting to the ease with which digital content could be shared on the Internet.
Since the lawsuit was filed, online streaming of shows and movies has become common, and many creators have formed alliances with services such as YouTube, Netflix, Hulu and others.
The Viacom lawsuit was merged with a similar complaint being pursued by the English Premier League, which said football clips were also routinely posted on YouTube without authorisation.
Viacom's suit charged that YouTube was a willing accomplice to "massive copyright infringement" and sought more than USD 1 billion in damages.
The suit was dismissed in June 2010 on the grounds that YouTube was protected against Viacom's claims by provisions of the Digital Millennium Copyright Act but appeals were pending.
The 1998 law protects Internet firms from copyright violations by their users, and the judge ruled that YouTube's actions, such as quickly removing infringing videos when requested, were in line with the measure.
Viacom's film and television empire includes many youth-oriented networks like MTV and VH1, popular comedy shows such as Jon Stewart's "The Daily Show" and the Paramount movie studio.
YouTube was a year-old Internet sensation when Google bought it in a USD 1.65 billion stock deal in 2006. Initially a source for sharing of home and amateur videos, YouTube has gradually added professional content and now generates revenue from advertising and paid channels.
"This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together," a joint statement by the companies said, without offering details.