The Beijing Pangu Investment Co. Ltd. said the two sides "have gained mutual trust and reached understanding" after friendly negotiations, days after it demanded edits to remove any reference to its property over an alleged contractual default.
"Because a third party created some misunderstanding, we were having some disagreement with Paramount," said Norman Song, general manager of the Pangu 7 Star Hotel. "After several days of intense discussion, we came to an agreement.
Rob Moore, vice-president of Paramount, told a news conference that the film would be released in mainland China, as scheduled, on Friday, the official Xinhua News Agency said.
He said a team has been set up to negotiate with Pangu and that the depiction of Pangu in the film is "perfect," according to Xinhua.
Director Michael Bay said he wanted to "put all this misunderstanding aside." Neither side provided details.
The Beijing company, which owns the commercial complex Pangu Plaza, announced last week that it had filed a lawsuit with allegations that Paramount and two of its Chinese associates failed to fulfil their obligations in a sponsorship deal.
Pangu said an English-version contract as provided by Paramount was remarkably different from a Chinese-version contract Pangu signed with the two associates in terms of costs and the length of time Pangu is seen in the film.
"Transformers: Age of Extinction," the fourth film in Bay's blockbuster franchise, opened last week in Hong Kong and premieres in North America on Friday.