Nike, the world’s biggest sporting goods maker by sales, took over from Reebok as a National Football League sponsor this month and was angered when its rival sought to capitalise on Mr Tebow’s transfer to the Jets in late March.
The US judge Kevin Castel ordered Reebok, an Adidas subsidiary, to stop making and selling unauthorised Tebow products in a ruling on Monday. He also told the company to recall all products in distribution channels and to tell retailers that selling them could expose them to liability.
Nike had made a claim for damages, but the judgment made no reference to any being awarded. It said no costs or fees were to be paid to either party.
The companies issued separate but identical statements on Tuesday that said: “We’re pleased to have reached a mutually agreeable resolution.”
Mr Tebow became an unlikely hero for snatching a string of last-ditch wins for the Denver Broncos and taking them to last season’s play-offs. He is a devout Christian famed for celebrating wins by sinking to one knee in prayer.
Nike unveiled its new NFL uniforms on April 3 and the deal with the American football competition is expected to be a key driver of its sales growth this year in the US. The new season begins in September.