A deal has been agreed in which Russia will receive compensation for France's decision last year to cancel the sale of two warships, both countries say, reports the BBC.
France will fully refund Russia for the two helicopter carriers. The deal was worth €1.2bn (£838m; $1.3bn) and Russia made an advance payment of about €840m.
The Kremlin says that it now considers the dispute to be fully resolved.
French President François Hollande's office said that Russia will be "fully reimbursed" for the two warships.
It said that France will keep both vessels.
France stopped the planned sale after the outbreak of the conflict in eastern Ukraine.
The Kremlin said that France has agreed to pay back money Russia paid under the contract.
"France has already transferred these funds and, after the return of equipment, will acquire ownership and be able to take charge of both ships," it said in a statement.
The Elysée Palace statement said that all Russian equipment installed on the ships will be removed and handed back to Russia.