The Beckhams had brought the case against the News of the World, which published interviews with their former nanny purporting to reveal details of their private life.
At an earlier court hearing, the paper's lawyers said it would try to show the couple were "cynically and hypocritically" misleading the public by pretending their marriage was perfect.
Lawyers for the Beckhams said they would argue that they were in fact happy and that the newspaper had hurt their reputation by writing otherwise.
Both sides issued statements on Thursday saying they had reached a confidential agreement to withdraw the case. Neither would elaborate.
Questions about the Beckhams' marriage became front page news in Britain in 2004 when Rebecca Loos, a former personal assistant of David Beckham, claimed to have had a sexual relationship with the England soccer captain.
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