Details of the settlement were not disclosed.
Lee had obtained an injunction last month blocking the name change, claiming that the proposed name was an attempt to exploit his image and reputation without his permission. A California Supreme Court judge lifted that order on Monday.
TNN, formerly known as The National Network and The Nashville Network, has struggled to find a niche in the increasingly fragmented cable landscape.
Viacom says the rebranding, including the new name, is designed to appeal to young males.
In addition to reruns of programs such as "The A-Team"
and "Miami Vice," the network is set to premiere "Stripperella," an animated series featuring the voice and likeness of former "Baywatch" star Pamela Anderson.
Viacom is a significant shareholder in MarketWatch.com, and owner of CBSNews.com.