"I can confirm that we have reached a settlement and all parties are satisfied. The figure is under, but in the region of, two million kronor," said Tomas Axelsson at Lindahls to The Local on Wednesday.
77-year-old Karatzoglis, whose picture adorns the Turkish yoghurt product, had argued that the company did not have permission to use his image and originally sued for 50 million kronor ($6.9 million).
The dairy and the man have now reached agreement over the use of his image.
"We have always maintained that we had the rights to the image, but now we have settled the issue and plan to continue to use it on the product," Akelsson said.
Lindahls had obtained the image from a photo agency.
Minas Karatzoglis, who lives in Greece, was made aware of the use of his picture on the popular Swedish product when an acquaintance living in Stockholm recognized his bearded friend.
In his writ he underlined that he is not Turkish, he is Greek, and lives in Greece, and the use of his picture is thus misleading both for those who know him and for buyers of the product.
Tomas Axelsson claimed that the firm has not benefited from the publicity regarding the use of the image.
"We have neither gained nor lost. We are happy that we have reached an agreement," he said.