A group of four valley businesses were challenging the authority's environmental impact report for the train's route from Merced to Fresno.
But the businesses dropped the lawsuit Friday after negotiations with the state. As part of the agreement, the businesses agreed to not ask the state for fees or any money.
Less than a month ago the high-speed rail authority settled a similar lawsuit with the City of Chowchilla.
The project is expected to break ground in Fresno later this year.