Terms of the settlement were not disclosed. The companies said they expect the lawsuit, which was filed in Texas state court in Austin, to be dismissed within the next two weeks.
Motorola sued Intel in March, alleging that Intel violated laws against trade-secret misappropriation when it hired about 15 PowerPC designers away from Motorola. Motorola sought a court order forbidding the engineers from taking positions in Intel where Motorola trade secrets would be used.
Motorola alleged that Intel first hired away Mark McDermott, the head of Motorola's Somerset design center in Austin. Ten days later, Motorola, claimed, Intel announced plans to open a similar center nearby.
Intel spokesman Chuck Mulloy declined to discuss the settlement except to say that it "addresses the concerns of both parties." Representatives from Motorola could not be immediately reached for comment.