The Hammers were due to go to the High Court in a bid to present their case against E20, a subsidiary of the London Legacy Development Corporation.
West Ham pursued legal action after two years of unsuccessful talks with their landlords, during which time they have been limited to selling 57,000 tickets per home game.
However, the two parties have now confirmed that an agreement has been reached towards the London Stadium's capacity going up by 9,000 seats.
A statement on the Hammers website read: "Subject to regulatory permissions, the club will be able to sell up to 60,000 tickets for their games as soon as possible and leaves scope to expand up to 66,000 seats for future matches.
"The agreement brings with it more funding for E20 and significant additional revenue for West Ham United on matchdays - a deal that works for everyone."
The new arrangement will see the London Stadium become the largest football stadium in London and the second biggest in the Premier League behind Old Trafford.
Opinion on Twitter has been largely split among the West Ham fan-base, with some hailing the positive outcome:
Great news about time— Jay (@JayCorb12568283) 19 November 2018
Have to hand it to Karen Brady, she is one tough businesswoman.— Riley Cullum (@aceofspies64) 19 November 2018
Great news , chance to clear some more off the waiting list, maybe a half season ST after Xmas .— Dave RedgewellOS2016 (@redgewd) November 19, 2018
epic thankyou ds and dg— Bienvenue Kikwit (@BeatTheBatak) November 19, 2018
Other fans, meanwhile, were not impressed with the news, and wondered whether West Ham will be able to fill those extra seats given the team's mediocre displays in the Premier League:
Good news for the club and E20 but will 66,000 want to watch a mid-table club...time to climb up the league and challenge for a European place.— Martin Johnson (@EdwardJames) November 19, 2018
We can't even fill the seats we have, so that just means even more empty seats— Peter goulding ⚒ (@Goulding1Peter) November 19, 2018
Great. Even more empty seats then.— AllSportsView (@AllSportsView) November 19, 2018
Seems pretty pointless seeing as so many seats are left empty even though they’re paid for already— . (@stainton153) November 19, 2018
That’s a big capacity when we can’t really fill it already and we need European football there as well— d a m o (@_thedamo) November 19, 2018
And a number of fans were pleased that they would claim bragging rights over local rivals Tottenham Hotspur in terms of having the largest ground in the capital:
and spurs thought they would have the largest stadium in london— Boe Fowler (@boefowler23) November 19, 2018
Biggest stadium in London.. 2nd biggest in the league. Massive supporter base, great youth prospects coming through. If we had a decent board we'd be flying!— Giesen (@Giesen12) November 19, 2018
West Ham moved into the old Olympic stadium in Stratford in 2016, having signed a 99-year lease and paying rent of £2.5million a year.
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