Zverev's former partner Brenda Patea "was no longer interested in pursuing the prosecution", said Inga Wahlen, deputy Berlin criminal courts spokeswoman.
The plaintiff and the tennis star had decided "they would like to resolve this smouldering conflict peacefully, also in the interests of their child", she said.
The appeal hearing opened last week in Berlin but the world's Number Four tennis player, who was to compete against Casper Ruud in the semi-finals at Roland Garros later on Friday, had been absent from the proceedings.
As part of the settlement announced on Friday, Zverev had agreed to pay 200,000 euros (£170,000), with most of it going into state coffers and the remainder to a fund for charitable organisations, the court spokeswoman said.
The German had already been fined 450,000 euros (£390,000) in October in the same case.
He was accused of "briefly" choking Patea "with both hands" in May 2020, according to the court.
The alleged incident took place in the stairwell of her apartment building in the capital, the court said.
Patea is said to have suffered "difficulty breathing and significant pain" as a result of the assault.
Zverev rejected the accusations and lodged an appeal.
Winning streak
After Friday's settlement was announced, his lawyers stressed he was "still considered innocent".
Speaking to reporters in May ahead of the case, Zverev said: "I do know what I did. I do know what I didn't do. That's, at the end of the day, what's going to come out and I have to trust in that."
The sportsman's lawyers had said the criminal complaint, filed over a year after the incident, was linked to a dispute over custody and maintenance payments in relation to the couple's daughter.
Patea's lawyer, however, rejected suggestions the trial was just about money.
The opening of the case in Berlin had come in the middle of the two-week French Open tournament, and hearings had originally been scheduled through to mid-July.
Zverev is on an 11-match winning streak after clinching the Rome title last month but he has never reached the final at Roland Garros.
In January 2023, the ATP, which runs the men's tennis tour, closed an investigation into allegations of domestic abuse against Zverev involving a female tennis player after finding insufficient evidence.
The ATP had opened the probe into Zverev in October 2021 following allegations made by his former girlfriend, Olya Sharypova.
