The deal came less than a week before a deadline faced by developers to pay off a $7.5 million loan on the property between Evans Town Center Boulevard and North Belair Road to Queensborough National Bank.
"(The settlement) will allow them to relieve some funding obligations, and allow them to breathe and plan," Commission Chairman Ron Cross said.
Property co-owner Joe Marshall said he and his partners were making arrangements to pay off the note, but the county's deal seemed the most equitable.
"We feel, in the reality of the real estate market today, this was the best option," Marshall said.
Those involved called the settlement a "win-win."
Marshall Square attorney Bill Trotter said the settlement is the "most unusual thing I have participated in, in 40 years of practicing law."
Rarely, he said, will both parties feel satisfied after settling a lawsuit.
Marshall said the settlement benefits both the county and his partners because officials agreed to make infrastructure improvements, such as extending Ronald Reagan Drive to North Belair Road, which might cost as much as $2.5 million.
The developers filed suit after commissioners limited the number of apartments that could be constructed at the site.
The initial zoning for the multiuse development in 2004 allowed for 459 apartment units. When developers tried to change the plans, the commission limited apartment construction to 189 units.
In court documents, developers called the limitation "overly restrictive" and "unduly burdensome."
Despite their indignation, developers withdrew $40 million in punitive damages from the lawsuit in March.
A second blow suffered by the developers came in April, when Superior Court Chief Judge J. Carlisle Overstreet denied them a motion for partial summary judgment. Developers were seeking an immediate payout of $10.3 million to cover infrastructure, engineering and other development costs.
The lawsuit officially will be dismissed once county officials close the deal July 30.
The terms of the settlement agreement give the developers first right of refusal to buy back the land on resale and deny any plans for residential development on the entirety of the land.
The settlement will be paid for using money from the county's reserve fund, which will later be replenished with 1-percent sales tax dollars earmarked for land purchases or from the resale of the land.
Officials and developers said Thursday that they might develop a master plan for the property to guide future development.
Current uses allowed on the portion of the land still owned by Marshall Square include professional and medical offices, retail stores and a restaurant. The county now owns the land intended for apartments.
"We would like to see the area develop as the Marshall family intended ... without the residential component," Cross said.