It has written a cheque to Larry Ellison for $306 million in damages to clear claims of copyright infringement.
The two companies agreed to the $306 million figure "to save the time and expense of this new trial, and to expedite the resolution of the appeal".
A Northern California jury determined in 2010 that Oracle should be paid $1.3 billion after SAP subsidiary TomorrowNow wrongfully downloaded millions of Oracle files. TomorrowNow has since been shut down.
According to Reuters, a US District Judge, Phyllis Hamilton, chucked out the jury verdict saying that $272 million was more than enough for Oracle and if it wants any more it should opt for a new trial.
SAP has agreed to pay Oracle $120 million for legal bills which it has already paid.
An SAP spokesman said that the case has gone on long enough and a new trial needs to be avoided.
The company feels that $306 million is more than the appropriate damages amount.
But it is all not completely over. The agreement requires court approval, but it would allow Oracle to ask the 9th US Circuit Court of Appeals to restore a $1.3 billion jury award in the case.