Kyle Massey Settles Beef Over Bristol Palin Reality Show

Kyle Massey has laid down his sword in his legal war over a Bristol Palin reality show -- after reaching a financial settlement with the producer who allegedly stole the idea from him.

We broke the story ... Kyle and his brother Chris had filed a lawsuit, claiming they came up with the idea to produce a reality show focusing on Bristol raising her son in L.A. ... only to have a TV producer highjack the idea, sell it to Lifetime, and cut them out of the project.

The Masseys had demanded more than $500k in damages.

But now, a rep for the bros tells TMZ the battle is officially over ... after both sides reached a financial settlement. The details of the deal are unclear -- though we're told the Masseys are satisfied.