Both firms had claimed the other had infringed the rights to its technologies.
The announcement came hours before a ruling that could have blocked Nvidia from importing some of its products into the US.
Although the agreement brings the dispute to a close, Nvidia said the terms of the deal were limited.
"The settlement includes the licensing of a small number of patents by each company to the other, but no broad cross-licensing of patents or other compensation," it said.
Samsung added: "We are happy to resolve this dispute through a fair settlement."
Neither company is disclosing any further details.
The clash was first made public in September 2014, when Nvidia held a news conference during which its chief executive declared the South Korean tech giant was "using our [graphics] technology for free in their devices".
Jen-Hsun Huang went on to say that his firm was suing the smartphone-maker after months of failed talks.
Two months later, Samsung counter-sued claiming its innovations had been used without permission in Nvidia's Shield tablets and chips.
When the International Trade Commission - a US agency that investigates patent disputes - looked into the matter, it ruled that Samsung's graphics processors had not infringed Nvidia's patents.
But in a follow-up decision, it said Nvidia's chips had violated three of Samsung's patents.
The ITC had been due to announce whether this warranted an import ban, but will no longer do so because the case has been dismissed.
Samsung and computer-chip-maker Nvidia have settled a two-year patent battle.