The official Xinhua News Agency reported Friday that a Palau judge has approved an out-of-court settlement that will release the men April 18.
The fishermen were detained March 31 after local authorities fired shots at one of their two boats, killing one crew member.
An American pilot and two Palau police officers aboard a small airplane who were dispatched to track one of the Chinese fishing boats went missing. The U.S. Coast Guard suspended a search for them last week.
Palau is about 800 kilometers (500 miles) east of the Philippines.