Twenty-one students at Athlone Institute of Technology, who had been told in July last that their BSc degree programme in audiology had been cancelled, will now be able to complete the course.
The High Court had heard the institute had been forced to cancel the only audiology undergraduate course in Ireland because the Higher Education Authority had refused to fund it.
AIT claimed this was because the Health Service Executive would not guarantee the students with clinical placements.
The institute had offered the students places in alternative courses.
Two students - Megan Munnelly, of Knockbrack, Corballa, Co Sligo, and Diarmuid O'Connor, of Ballyvodock, east Midleton, Co Cork - sued AIT, the HEA and the HSE and asked the High Court to quash the institute's decision.
Mr Justice Gerard Hogan was told today that the case had been settled.
Feichin McDonagh SC, counsel for AIT, said the students would be able to resume their studies in audiology in early September.
Barrister Paul Anthony McDermott, for the HSE, said it was in a position to offer a number of clinical placements for the students when they entered their third year.
He said the offer was being made on a once-off basis only to this particular group of students.
Barrister Gary Compton told the court the HEA was happy to provide funding for the course now that suitable arrangements had been put in place.
Mark Harty SC, who appeared with Eoin O'Shea for the students, said his clients, their classmates and their families were delighted with the outcome.
He said the students were looking forward to continuing their studies.
Judge Hogan had earlier suggested that the parties see if some ad hoc arrangement could be put in place.
The action, which had been opposed by AIT, the HEA and the HSE, arose following AIT's decision to cancel the course because the HEA would not fund the four-year programme, which includes a year-and-a-half-long work placement.