Under the deal, HTC will make payments to Nokia and the collaboration will involve HTC's LTE patent portfolio to further strengthen Nokia's licensing offering, a company statement said.
The companies will also explore future technology collaboration opportunities, HTC said, adding that the full terms of the agreement are confidential.
"Nokia has one of the most preeminent patent portfolios in the industry," said Grace Lei, general counsel of HTC. "As an industry pioneer in smartphones with a strong patent portfolio, HTC is pleased to come to this agreement, which will enable us to stay focused on innovation for consumers."
Nokia said it was "very pleased" to have reached the settlement and collaboration agreement with the Taiwanese company.
"This agreement validates Nokia's implementation patents and enables us to focus on further licensing opportunities," said Paul Melin, chief intellectual property officer at Nokia.
Nokia started its patent litigation against HTC in 2012 and filed more than 50 lawsuits worldwide. HTC was found to be in violation of four Nokia patents.
Technology giants have taken to routinely pounding one another with patent lawsuits. Apple has accused HTC and other smartphone makers using Google's Android mobile operating system of infringing on Apple-held patents.
HTC and Apple were locked in more than 20 cases worldwide until they reached a global settlement in late 2012 to end all outstanding litigation between them.
HTC sells its own smartphones and also makes handsets for a number of leading US companies, including Google's Nexus One.
In the 2013 third quarter, HTC swung to its first net loss of USD 101 million since listing in 2002, as it struggled to increase its foothold in the highly competitive smartphone market. It reported a net profit of USD 10.3 million in the fourth quarter.