West Indies Board (WICB) president Patrick Rousseau said late Monday that a deal had been struck, including the reinstatement of captain Brian Lara and his number two Carl Hooper who were sacked after leading the revolt.
The agreement means the West Indies tour, initially due to start on Tuesday, will now begin a day later against Gauteng in Soweto.
Rousseau said: "A settlement has been reached tonight which will allow the tour of South Africa to go ahead.
"Brian Lara and Carl Hooper have been reinstated, and no disciplinary action will be taken against any of the players."
The West Indies team, due to leave for South Africa late Monday, has been stuck in a hotel at London's Heathrow airport for the last week while the dispute has dragged on. Lara and Hooper were backed by their teammates who refused to leave without them.
Rousseau denied there had been a climbdown on pay by the board and claimed Lara's dismissal as captain was the result of a mix-up.
"I don't think it's a question of us giving way, and there has been no increase in the fees for the players for this tour," he said.
"Brian Lara was sacked because of a misunderstanding between the players and the board.
"After lengthy talks between players and officials over the past two days both sides acknowledge that the dispute arose from a misunderstanding between the two parties.
"All issues related to fees and conditions for the South Africa tour have been resolved between the two parties.
"The WICB and the West Indies Players' Association will work closely together in a joint marketing programme from which all funding raised will be shared between the players and the WICB."
Dr Ali Bacher, managing director of the United Cricket Board of South Africa, teamed up with Rousseau to end the impasse. Bacher flew to London on Thursday with a letter from President Nelson Mandela requesting the players to tour. The breakthrough followed seven hours of talks on Sunday.