While Jeffery Scalf sued in 2001 attempting to stop the museum from displaying items linked to his great-uncle, he reached an agreement with the Lake County Convention and Visitors Bureau on the matter and the museum was allowed to reopen, The Gary (Ind.) Post-Tribune reported Saturday.
Details of that settlement have not been released, but both sides said they were glad to end the litigation.
The official reopening Friday comes as interest in Dillinger's life is growing thanks to a new Hollywood production.
Filming took place this week in Indiana for the movie "Public Enemies," which will feature actor Johnny Depp as the renowned gangster.
The Post-Tribune said the museum in the Indiana Welcome Center is focused on offering visitors a glimpse into the lives of Depression-era gangsters like Dillinger.