In a statement Ericsson said the deal was for a multi-year global patent cross-licensing agreement that covers the companies’ respective sales of network infrastructure and consumer devices.
Under the agreement both companies global access to each other's patented, standardized technologies, including smartphones.
"We are pleased to announce our renewal of our global cross-licensing agreement with Huawei," said Christina Petersson, chief intellectual property officer at Ericsson.
"Both companies are major contributors to mobile communication standards and recognize the value of each other's intellectual property. This agreement demonstrates the commitment of both parties that intellectual property should be respected and rewarded, and that leading technological innovations should be shared across the industry."
According to Electronics Weekly, the deal involves a payment of an undisclosed amount from Huawei to Ericsson.
Ericsson said its patent development is helped by an annual investment of $4 billion in R&D and that its revenues from IP licensing will reach more than $1 billion this year.