The settlement stems from the Justice Department's antitrust case against Microsoft in the mid-1990's, in which Judge Thomas Penfield Jackson found the giant software company's practices harmed the International Business Machines Corporation, based in Armonk, N.Y. That case was settled in 2001.

Under the agreement announced today, I.B.M. will also receive a $75 million credit toward using Microsoft software. It is the latest, and one of the largest, in a string of antitrust settlements totaling more than $3 billion between Microsoft, based in Redmond, Wash., and its rivals. In April, Microsoft said it would pay Gateway $150 million. Last year, it agreed to pay Sun Microsystems $1.6 billion, Microsoft's largest such payout.

I.B.M. and Microsoft, which issued a joint statement today, came to an agreement just weeks before a deal to extend the statute of limitations on the claims was to expire in July. The companies said they had been negotiating for the last two months.

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The settlement includes claims related to I.B.M.'s OS/2 operating system and SmartSuite software package, neither of which ever established more than a toehold in the personal computer market dominated by Microsoft's Windows and Office software. In the agreement announced today, Microsoft also dropped antitrust claims against I.B.M.

But the agreement did not cover claims of damage to I.B.M.'s server hardware and software business. I.B.M. has agreed, with some unspecified limitations, not to seek damages on harm to its server business before June 30, 2002. An I.B.M. spokesman, Scott Brooks, declined to say which, if any, of those claims the company planned to pursue.