2:45 PM PT -- It appears part of the settlement includes Brandi making a public mea culpa. She just released this statement to TMZ ... "I want to apologize to Joanna Krupa for the statements I have made about her. I regret ever making such statements about Joanna Krupa; I also certainly never intended my statements to be taken so seriously and out of proportion."

She added, "I apologize as I never wanted my statements to affect Joanna Krupa's reputation and I wish her nothing but continued success in life."

The big stink is over -- Joanna Krupa and Brandi Glanville struck a settlement in the infamous smelly vagina lawsuit ... TMZ has learned.

We just got a hold of new docs filed Tuesday confirming both sides have reached a "full and final settlement." Joanna's now officially withdrawing her defamation suit against Brandi.

Sounds like there was a financial settlement, but the terms are confidential.

As we reported ... the beef started in 2013 when Brandi -- while appearing on "Watch What Happens Live" -- claimed she'd heard from a friend that Joanna's lady parts smelled.

Brandi said it a second time ... prompting the defamation suit. Joanna's estranged husband even testified recently ... her vajayjay's "better than any other woman in the world."