Australia has announced a 555-million-euro ($585m; £475m) settlement with France's Naval Group as compensation for scuppering a submarine contract with Paris, reports BBC News.
Australia angered France last year by suddenly cancelling a 35-billion-euro deal to build a fleet of submarines.
Instead, it chose to build nuclear-powered submarines with US and UK technology - the so-called Aukus deal.
The settlement draws a line under a bitter row that threatened to torpedo EU-Australia trade agreement talks.
Anthony Albanese, who became Australia's prime minister last month, said it was a "fair and an equitable settlement".
He added that he would travel to France soon to "reset" a relationship beset by "pretty obvious" tensions.
French defence minister Sebastien Lecornu said the settlement "permits us to turn a page in our bilateral relations with Australia and look to the future".
The agreement between Australia, the US and UK will see Canberra being given the technology to build at least eight nuclear-powered submarines as a way of countering China's influence in the contested South China Sea.
The pact will also cover artificial intelligence and other technologies in what analysts say is one of the countries' biggest defence partnerships in decades.
It means Australia will become just the seventh nation in the world to operate nuclear-powered submarines.