The state and the contractor were at odds over $800 million in cost overruns.
Maryland has agreed to pay $250 million to settle the suit in order to move forward with the project that Governor Larry Hogan described as “a transformative project for our state and region.”
The only remaining step is approval from the Board of Public Works.
As part of the agreement, one of the three contractors involved in Purple Line Transit Partners, Fluor, will leave the project, leaving just Meridiam and Star America.
They will seek a new partner to help complete the project.
The Purple Line will be a 16-mile light rail between Bethesda and New Carrollton, stringing together more than 20 stations in D.C.'s suburbs.
Construction has been halted since September.