For several weeks, the 29 year-old star and the 31 year-old former Playboy Playmate, were battling over the rights of the tape, which was created in 2003.
Farrell, who starred in Phone Booth, The New World, and Alexander, among others, accused Narain of wanting to make a financial profit by marketing the porn video with Internet Commerce Group (ICG).
The dispute was first filed last summer, which led to a judge putting a temporary stop on the release of the video, until an agreement could be reached.
According to the New York Daily News, on Easter Sunday lawyers for each side met and reached a settlement.