The two men will receive a symbolic $1 each from the city
Starbucks has confirmed it has reached a settlement agreement with two black men who were arrested at an outlet in Philadelphia.
They were detained last month as they waited for a friend at a branch in the city.
The men were asked to leave, before being arrested for 'trespassing'. No charges were filed against the pair.
The incident was captured on video and shared on social media, prompting protests and calls for a boycott of the coffee chain.
Starbucks has since apologised and sent nearly 175,000 employees for racial-bias training.
In a statement on Wednesday, the company said the decision was reached with Donte Robinson and Rashon Nelson after "constructive conversations" and "mediation before a retired federal judge".
It includes a confidential financial settlement.
Kevin Johnson, CEO of Starbucks Coffee Company, said: "I want to thank Donte and Rashon for their willingness to reconcile.
"I welcome the opportunity to begin a relationship with them to share learnings and experiences.
"And Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values and vision for the kind of company we want to be."
In a joint statement, Mr Robinson and Mr Nelson added: "We appreciate the opportunity to have meaningful discussions with Kevin Johnson and the group around the table to address hard issues.
"We all recognise the importance of communication about differences and solutions, and that we will be measured by our action not words."
As part of the agreement, Mr Robinson and Mr Nelson will have an opportunity to provide input based on their personal experience to former US Attorney-General Eric Holder as part of company's long-term diversity and equity efforts.
They have also been offered the opportunity to complete their undergraduate degrees through the Starbucks College Achievement Plan.
It comes after the Associated Press reported the men have settled with the city of Philadelphia for a symbolic US$1 each, and a promise from officials to set up a US$200,000 (€167,154) program for young entrepreneurs.
The men's lawyer, Jim Kenney, outlined the agreement to the news outlet.
"I am pleased to have resolved the potential claims against the city in this productive manner," he said.
"This was an incident that evoked a lot of pain in our city and put us under a national spotlight for unwanted reasons."