NEWPORT BEACH, Calif. — A bitter legal war between the bond investor William H. Gross and Pimco, the company he built into one of the biggest asset managers in the world, is over.

A lawyer representing Mr. Gross filed a request in California state court on Monday to dismiss the investor’s lawsuit over his 2014 ouster.

The terms of the settlement were not disclosed.

“We are pleased to have resolved the litigation,” said Seth Lubove, a spokesman for Mr. Gross.

A Pimco spokesman, Michael Reid, declined to comment.

The litigation had been a frustrating distraction for Pimco as it sought to recover from the damage done by Mr. Gross’s departure. Since his exit in September 2014, Pimco’s assets have slid to $1.47 trillion, from more than $2 trillion at the peak.

For Mr. Gross, the settlement comes as he seeks to refurbish his image and start again at a competitor, Janus Capital Group. Details that emerged on his split with Pimco portrayed him as erratic and authoritarian before and after he was forced out.

The settlement may also provide some sort of resolution psychologically for the investor, who has said he closely monitors his performance against Pimco and is “fixated” on proving they were wrong to force him out.

Mr. Gross had sued Pimco, the firm he co-founded in 1971, in October 2015 for breach of contract and breach of covenant of good faith and fair dealing.

In his lawsuit, Mr. Gross claimed he was wrongfully pushed out as the chief investment officer by a “cabal” of greedy partners among the company’s top executives. The colorfully worded lawsuit took particular aim at Mohamed El-Erian, the firm’s former chief executive, and Daniel J. Ivascyn, its current chief investment officer.

“Driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency, a cabal of Pimco managing directors plotted to drive founder Bill Gross out of Pimco in order to take, without compensation, Gross’s percentage ownership in the profitability of Pimco,” the complaint said. Pimco executives’ “improper, dishonest, and unethical behavior must now be exposed.”

Pimco had called the suit “legally groundless” and asked for its dismissal.

“Pimco has moved forward since Mr. Gross’s resignation,” the firm said in 2015. “It is time for him to do the same.”

Pacific Investment Management Company, or Pimco, has also been working to distance itself from the events of 2014.

With diminished money under management generating fees, the asset manager, based in Newport Beach, Calif., has trimmed its work force to 2,200 from about 2,400 in 2014. It has also closed some funds to decrease costs.

Emmanuel Roman, the former chief of the British hedge fund manager Man Group, started as chief executive in November. He took over for Douglas Hodge, the former chief operating officer who was tapped to lead the company after Mr. El-Erian’s departure.

In the three years that Mr. Roman led Man Group, he helped to stabilize its business and made multiple acquisitions as it aimed to push into the United States markets and expand its global reach to institutional clients.

He joined Pimco at a critical time for the money manager, as it tried to assure investors that a bond-heavy manager could weather a downturn in fixed-income markets, as interest rates rose.

Clients began to pull money from the Pimco Total Return fund in 2013, while Mr. Gross was still at the helm, as the Federal Reserve signaled it would end its stimulus programs, roiling bond markets. The firm’s flagship total return fund underperformed most peers that year and the next, data from Morningstar show.

The departures of Mr. El-Erian and Mr. Gross within the span of seven months accelerated client withdrawals. That year, investors pulled more than $100 billion from Total Return, once the world’s biggest mutual fund. Withdrawals have since slowed as performance steadied, and assets now stand at $74.2 billion.

In its first full year without Mr. Gross, returns surged to rank 15th among comparable funds, according to Morningstar, but fell below the middle of the pack last year. This year it has ranked in the top decile of comparable funds, Morningstar data show.

The Pimco Income Fund, managed by Mr. Ivascyn, tells a different story.

For the past five years, its performance has beaten benchmarks and most comparable funds, and as a result, clients have poured money into it. This year, it surpassed Pimco Total Return as the company’s biggest fund.

At Janus, Mr. Gross started an “unconstrained” fund, which has attracted just under $2 billion to date.

Performance in the new fund fared better than most of its peers in 2015 and 2016, including the similar fund at Pimco, co-managed by Mr. Ivascyn. This year it has lagged competitors.

Mr. Gross’s complaint took aim at those in line to succeed him, including Mr. Ivascyn, whom the suit claimed threatened to resign if Mr. Gross was not forced out, and Mr. El-Erian. Mr. El-Erian has served as chief economic adviser to Pimco’s parent company, the German insurer Allianz, since he left in March 2014.

The complaint portrays Mr. Gross as a defender of low-fee investment products, Pimco’s traditional focus, while Mr. El-Erian and Mr. Ivascyn pushed to take on more risk in higher-fee products in the interest of bigger bonuses.

The suit also said that top Pimco executives were motivated to unseat Mr. Gross for his 20 percent cut of the bonus pool, which in 2013 alone was $300 million.

Pimco recently resolved other outstanding litigation from the same time period, paying $20 million to settle with the Securities and Exchange Commission over claims it did not properly value securities in its exchange-traded fund version of Total Return. The company did not admit any wrongdoing, and it will retain an independent compliance consultant as part of the agreement.