Legal battles between the companies included suits over technology for Internet-linked mobile devices, WiFi and digital video.
Details of the agreement were not disclosed, but the tech behemoths said it includes cases related to Motorola Mobility.
"The companies will dismiss all pending patent infringement litigation between them, including cases related to Motorola Mobility," Microsoft and Google said in a joint statement yesterday.
Google last year sold Motorola Mobility to Chinese computer giant Lenovo in a deal valued at USD 2.9 billion, but held on to patents.
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The kind of collaboration the industry rivals have in mind was not disclosed.
Microsoft chief executive Satya Nadella has made a priority of making the company's applications and cloud services available across mobile devices, regardless of what software powers the hardware.
Microsoft would also like to boost the popularity of Windows smartphones and tablets with popular Google offerings such as YouTube.