Britney Spears is no longer facing hit-and-run charges after she compensated the other car's driver, a judge in Los Angeles has ruled.
Ms Spears' is also embroiled in a custody fight over her two sons
But the 25-year-old singer is still facing a charge of driving without a valid licence.
Ms Spears' lawyer entered a not guilty plea on her behalf, and a further hearing was set for 26 November.
She allegedly crashed into the parked car in full view of photographers, before leaving the scene on 6 August.
The owner of the car filed an accident report on 9 August at a police station in North Hollywood.
Ms Spears' lawyer Michael Flanagan said that the owner of the car that was hit was satisfied with the resolution and did not want to go forward with the hit-and-run charge.
Speaking outside the court, Mr Flanagan said assistant city attorney Michael Amerian had offered the singer a plea deal on the licence charge which would have resulted in her being placed on probation for a year.
But Mr Flanagan said he believed a plea was unnecessary because Ms Spears had rectified the situation by recently getting a California driving licence.
He added that the singer had a licence in Louisiana, but she had not been able to obtain one in California because a camera was not available when she applied for one.
Meanwhile, a court hearing in Ms Spears' custody fight with former husband Kevin Federline over their two young sons is scheduled for Friday.