Lawyers representing the rappers fired off a cease and desist letter to bosses at Goldieblox last week (ends22Nov13) after spotting the ad, in which three young girls sing alternative lyrics to the track.
The legal threat prompted company officials to request a declaratory judgment that the recorded song and video did not merit a copyright infringement suit.
But the stand-off ended on Tuesday (26Nov13) when the video track was replaced with a new tune.
Goldieblox bosses have posted a note to the existing two Beastie Boys on the company's website, which reads: "We don't want to fight with you. We love you and we are actually huge fans... Our hearts sank last week when your lawyers called us with threats that we took very seriously. We were completely unaware that the late, great Adam Yauch had requested in his will that the Beastie Boys songs never be used in advertising.
"Since actions speak louder than words, we have already removed the song from our video. In addition, we are ready to stop the lawsuit as long as this means we will no longer be under threat from your legal team."
The original video has now been marked private on YouTube.com.