Williams and Erin Marzouki announced they "reached an amicable agreement" regarding the dispute over the ring.
The terms of the agreement were kept confidential.
Williams filed a lawsuit in May, demanding Marzouki return the ring and accusing her of breaking off their engagement last January.
Marzouki counter-sued, accusing Williams of the break up.
In the statement Thursday, Williams apologized for initiating the lawsuit, calling Marzouki a "great person" and saying he regretted how their engagement ended.
"Ms. Marzouki did not deserve the media backlash she received as a result of this lawsuit because it in no way describes her good character," the statement said.
Marzouki said she regretted the release by her lawyer of text messages between her and Williams that seemed to indicate the player was quite despondent over their breakup and possibly contemplated suicide. Williams later said he was never suicidal and the text messages were blown out of proportion.
The text messages were released without Marzouki's knowledge and "were taken out of context by the media. Ms. Marzouki believes that the media reports do not reflect the good character of Mr. Williams," according to the statement.
In his lawsuit, Williams had alleged that Marzouki never had any intention of marrying him and accused her of absconding with the ring and using the relationship as a means to get at his money.
The lawsuit was filed a little over a year after Williams and Marzouki happily posed for pictures in the Bills' media room once the team signed the free agent to a six-year, $100 million contract - the richest awarded to an NFL defensive player.
In her countersuit, Marzouki called Williams' claims "ridiculous" and "patently false" and said that Williams made it "abundantly clear in writing" that he wanted her to keep the ring following their last of many breakups in December 2012.