Kendall Jenner Settles 818 Tequila Lawsuit with Tequila 512

Kendall Jenner does not have to change her area code in hawking her tequila brand, because she's just settled the lawsuit that had her booze on the rocks.

Kendall's company was sued by the owners of Tequila 512 ... ICYMI, 512 is the area code for Austin, TX. Kendall's spirits are called 818 Tequila, a nod to the San Fernando Valley where her fam put down roots.

512 claimed 818 is a blatant rip-off, and to add insult to injury, the labels have similar color schemes and layouts.

512 was also pissed off that Kim's app -- Kim Kardashian: Hollywood -- was promoting 818 but 512 claimed their bottle was actually featured in a prominent image of KK clutching tequila.

Well, now we've learned the 2 area code companies have settled their beef, and both can use their respective digits.

CEO of Tequila 512, Nick Matzorkis, tells TMZ ... "Tequila 512's lawsuit against 818 Tequila has been resolved. The parties have agreed that they will each have the right to use their existing names and they will both make changes to their labels to clarify that they are not related to each other. Tequila 512 has dismissed its case."

Under the terms of the settlement, 512 will add "Est. 2012" to its label. No word on what changes 818 will make.