In a joint statement Sunday, the two companies said they also signed a 10-year license agreement that will extend to current and future patents held by one other.
Apple and HTC had battled patents over various smartphone features since March 2010, with the Cupertino-based firm accusing HTC phones that run on Google's Android software of infringing on its patents.
HTC chief executive Peter Chou says ending the litigation will allow his company to focus more on product innovation.
HTC has grown as the first maker of phones running on Android software. But its sales faltered from the second half of 2011 in a market increasingly divided between Apple and Samsung Electronics Co.
(Copyright 2012 by The Associated Press. All Rights Reserved.)