The Oscar winner sued Ascendant Pictures after the firm pulled out of their contract to make the film with Costner in the lead role.
The 53-year-old The Bodyguard star argued the lost project had cost him about $8 million (GBP4 million) in earnings and the case was due to be heard in court on Wednesday (05Mar08).
However, the two parties came to an out-of-court agreement on Monday (03Mar08), according to Costner's lawyer William Bossen.
Details of the settlement have not been released.
Source: WENN