The out-of-court settlement came after HCM City's Australia International Language School apologized and compensated the publishing house following three negotiating sessions with Tri Viet.
Tri Viet and Compass Media, an American company that sold Tri Viet the copyright to publish English-language textbooks, filed the lawsuit 11 months ago.
The Vietnam-Australia Society English Centre was also sued for pirating, but it denied the charge and refused to apologize or offer compensation.
Nguyen Van Phuoc, owner of the book company, announced that he would continue the lawsuit against the school.
Ho Dang Duy, general manager of HCM City's Australia International Language School, said the school used the pirated books to help students save money. However, the school has also already asked all students to use the original books.
"On behalf of the school, I apologize to Tri Viet Company. I hope all other foreign language schools stop using pirated textbooks and materials," said Duy, adding that more than 20,000 pirated books were sold.
In response to the apology and compensation, Phuoc decided to withdraw the lawsuit.
Phuoc, who was the first person in Vietnam to file a book-piracy lawsuit, said Tri Viet's books had been copied and pirated since the opening of his company 14 years ago.
He said the case had set a precedent for Vietnam's publishing industry.
"Representatives of at least four publishing houses have called me to say congratulations, and they told me that they would file lawsuits against those who pirated their books," Phuoc said.
Last year, he publicly released a list of 12 foreign-language schools in HCM City that pirated textbooks, including the two that he later sued.
Of the 12, Phuoc plans to sue six of the HCM City schools and three private printing houses in Hanoi, despite the expected costs and challenges.
Tri Viet said Compass Media has completed documents allowing them to file other lawsuits.
More than 150 book titles owned by Tri Viet have been pirated. The company spends nearly VND3 billion each year to buy the copyright for 100 titles.