Under the terms of the settlement, Sun Pharma can market the therapy, which targets a type of blood cancer, from February 1, 2016. The patent on the drug, whose chemical name is imatinib mesylate, is set to expire on July 4, 2015 in the US.
Sun Pharma has a tentative approval for 100 mg and 400 mg doses of imatinib mesylate from the US Food and Drug Administration, according to the regulator's website.
Analysts expect Sun Pharma to earn about $50 million in FY16 from the drug.
Dr Reddy's Laboratories has also been battling Novartis over rights for generic Gleevec, however analysts say the Mumbai-based company will have first-to-file exclusivity for the six months after launch.
With annual sales of $2 billion, the blockbuster drug was the centre of patent controversy in India in 2013 when the Supreme Court denied a patent on the leukemia drug citing evergreening
The Swiss drugmaker had criticized the judgment saying, the decision discourages innovative drug discovery essential to advancing medical science for patients. Sun Pharmaceutical Industries, Glenmark Pharmaceutical, Cipla are some companies that market imatinib mesylate in India.