Sean Murray said his studio had endured "years of secret stupid legal nonsense" after the broadcaster Sky said the game's title infringed its trademark.
"We finally settled with Sky (they own the word sky). We can call our game No Man's Sky," he tweeted.
The game was expected in June, but has been delayed until August.
Hello Games has not revealed whether it paid Sky to settle the lawsuit.
"I now know more about trademark law than any sane man would ever want to," tweeted Mr Murray in a follow-up post.
The studio is not the first company to face a legal challenge from Sky, which provides satellite television and broadband services in Europe.
In 2013, Microsoft had to change the name of its cloud storage service SkyDrive to OneDrive, following an infringement claim.
A year earlier, US technology firm Livescribe pulled its Sky pen from UK stores after receiving a legal challenge from the satellite broadcaster.
It renamed the product "Livescribe wifi smartpen" and recalled stock using the old name.
Sky told the BBC it had no comment on the dispute.

Cafodd y datganiad ei wneud gan Ysgrifennydd Brexit, David Davis, a phrif drafodwr yr UE, Michel Barnier, yn dilyn trafodaethau cychwynnol ym Mrwsel ddydd Iau.
Dydd Llun oedd y dyddiad gwreiddiol yr oedd trafodaethau i fod i ddechrau, ond roedd amheuon am hynny yn dilyn canlyniad yr etholiad cyffredinol.
Mae'r trafodaethau rhwng y Ceidwadwyr a'r DUP wedi golygu y cafodd Araith y Frenhines ei symud o ddydd Llun i ddydd Mercher yr wythnos nesaf.
Fe wnaeth Theresa May danio Erthygl 50 ym mis Mawrth i ddechrau'r broses o adael yr UE.
Mae disgwyl felly i'r DU adael erbyn Mawrth 2019.
Mae'r pynciau fydd yn cael eu trafod yn cynnwys statws pobl o'r UE sy'n byw yn ym Mhrydain ar hyn o bryd, y costau fyddai'n rhaid i'r DU dalu i adael a sut y bydd y DU yn masnachu gydag Ewrop ar ôl hynny.
Ers yr etholiad yr wythnos diwethaf mae galwadau wedi'u gwneud am safbwynt trawsbleidiol i'r trafodaethau, a dywedodd Prif Weinidog Cymru Carwyn Jones nad oes gan Mrs May fandad ar gyfer Brexit caled bellach.
Ond mae Downing Street wedi mynnu na fydd eu strategaeth yn newid.
The maker of the highly anticipated video game No Man's Sky has revealed a legal challenge that threatened the game's name.
[NEXT_CONCEPT]
Bydd trafodaethau ffurfiol Brexit yn dechrau ddydd Llun, yn ôl Llywodraeth y DU a'r Undeb Ewropeaidd.