The airport is jointly run by the city and the nine other DCs in greater Manchester with the city holding a 55% stake and the others sharing the remaining 45%.
Manchester city argued that the nine did not have the right to participate in rent and lending to the same extent as their ownership. The argument revolved around the land for the building of terminal two and future development.
Following an unsuccessful judicial review by Manchester seeking to claim no powers for the DCs to lend, the nine started a trust action against the city in October 1991.
'All ten councils are agreed in respect of their airport responsibilities which is very important to secure a prosperous future for this important asset,' said a statement issued by Bolton MB.
The settlement gives an immediate payment of £500,000 each to the nine councils plus an estimated further £192,000 per year on top of any airport dividends receivable.
In return the nine will share the airport's £90.4m existing loan debt in respect of land and buildings.