The actor filed suit against Samuel Levin in October, 2009, alleging the business manager misled him and overcharged for his services.
The accusations stemmed from a $6.26 million (GBP4.2 million) tax lien Cage had been handed by America's Internal Revenue Service (IRS), alleging he failed to pay income tax on wages dating back to 2007.
Cage also faced other claims of unpaid tax related to his earnings between 2002 and 2004, while he was accused of defaulting on a $2 million (GBP1.3 million) loan last year (09).
Levin filed a countersuit, claiming Cage squandered his cash on homes and luxury cars and was to blame for his financial missteps.
However, new court documents obtained by TMZ.com show the pair reached a settlement on Monday (30Aug10).
Terms of the deal are confidential.