"Macy's has resolved its breach-of-contract lawsuit against Martha Stewart Living Omnimedia. We are pleased to be able to put this matter behind us," said the department-store retailer in a statement Thursday.
Terms of the settlement were not disclosed, Macy's added.
Following the report, Martha Stewart stock was trading lower. (Click here to track its shares.)
Macy's sued J.C. Penney and Martha Stewart after the two announced a partnership in December 2011. The settlement between Macy's and Martha Stewart does not affect Macy's claim against J.C. Penney.
Macy's said Martha Stewart's contract with Penney breached their agreement that included exclusive rights to Martha Stewart-branded cookware, bedding and bath products.
—CNBC with Reuters