TMZ broke the story ... the music producer claimed in a 2014 lawsuit that Pebe Sebert orchestrated a smear campaign of sexual lies against him. He also claimed Pebe wanted Kesha to break her contract with him, and when she couldn't, Pebe got Kesha to spread lies that he raped her.
But the parties have now agreed to dismiss the case with prejudice -- meaning it can't be refiled. Translation: They settled it, and one thing Luke got was a statement from Pebe regarding his sexual assault case with Kesha.
According to the statement ... "Pebe admits she has no firsthand knowledge of the events occurring on the night of the alleged rape. Pebe was not present that night. At that time, Pebe was in Nashville, and Kesha was in Los Angeles. The dispute between Kesha and Dr. Luke about the events of that night is the subject of the New York case, and will be decided in that case."
As we reported ... Pebe countersued Dr. Luke claiming he tormented and abused her by allegedly date raping her daughter. That case was dropped in April 2016.