Microsoft agreed to pay 775 million dollars to IBM in a settlement stemming from the the software giant's antitrust case with the federal government.

Microsoft will also provide a 75 million dollar credit toward use of Microsoft software at IBM.

The settlement resolves all discriminatory pricing and overcharging claims stemming from the U.S. government's mid-1990s antitrust case against Microsoft, the companies said in a statement . The settlement also resolves most other IBM antitrust claims, including those related to its OS/2 operating system and SmartSuite products. IBM's claims of harm to its server hardware and server software businesses are not covered by the settlement, however.

The court found Microsoft's practices hurt the IBM OS/2 operating system and SmartSuite software products.

"With these antitrust issues behind us, both Microsoft and IBM can move ahead, at times cooperatively and at times competitively, to bring the best products and services to customers," said Brad Smith, general counsel and senior vice president, Microsoft.

"Over the last few years we have been focused on resolving our disputes with other companies, and today's announcement takes another significant step towards achieving that goal."