The actor had filed a $100 million lawsuit against the studio after he was fired from the show in March.
“Warner Bros. Television, Chuck Lorre and Charlie Sheen have resolved their dispute to the parties’ mutual satisfaction,” the official statement reads.
“The pending lawsuit and arbitration will be dismissed as to all parties. The parties have agreed to maintain confidentiality over the terms of the settlement.”
Reports estimate that Sheen would walk away with $25 million and future syndication profits.
Lately, Sheen has been apologetic about his behavior at the beginning of the year that eventually triggered his firing from the successful CBS comedy show.
At the Emmy Awards, he publicly wished former cast mates well on their new season.