A lawsuit filed by Pacquiao in December 2009 sought unspecified damages for allegations made by Mayweather that the Filipino used performance-enhancing drugs.
And Malcolm LaVergne, representing Mayweather’s father Floyd Snr in the case, said the issue has been wrapped up.
''The matter has been resolved,'' LaVergne said.
''Any alleged terms of the resolution would be strictly confidential. Floyd Mayweather Snr is very happy that this lengthy case has finally come to a conclusion.''
In a statement, the Mayweather camp said they ''wish to make it clear that they never intended to claim that Manny Pacquiao has used or is using any performance enhancing drugs, nor are they aware of any evidence that Manny Pacquiao has used performance enhancing drugs.''
LaVergne said he did not know whether the court settlement means Mayweather and Pacquiao will meet in the ring.
The hugely-anticipated possible showdown between the pair, at one point regarded as the world's top two pound-for-pound boxers, had remained a pipe dream for fans for several years due to various factors.
Last week, a glimmer of hope came in the form of Pacquiao offering to meet Mayweather's previous demands of a 55-45 per cent purse split in the American's favour, removing one major hurdle.
Nevada State Athletic Commission supremo Keith Kizer claimed he wasn't aware of any talks between the two sides, but that an in-ring meeting could possibly eclipse records set by Mayweather’s fight against Oscar De La Hoya.
That event attracted 17,078 fans to the MGM Grand Garden Arena in Vegas with a paid attendance of £11.4 million for the Cinco de Mayo 2007 supercard.