"The applicant is granted leave to withdraw," Chief Justice Mogoeng Mogoeng said of the bid by retired banker Terry Crawford-Browne, to force Zuma and the government to appoint an independent inquiry into the multi-billion rand deal.
The order followed Zuma's announcement in September that he had decided to appoint a commission of inquiry into the deal, which has been dogged by allegations of corruption and bribery and has had political consequences.
For Crawford-Browne, Thursday's order and the announcement of the inquiry was "the beginning of the beginning".
"The president has conceded the need for a judicial inquiry. It's taken 12 years to get this far, from 1999," said Crawford-Browne by telephone from Cape Town.
"It is a remarkable precedent that we have got there because the government has used every trick they can to brush it under the carpet," he said.
The order granted on Thursday was that the president and the government pay the costs of two counsel for Crawford-Browne and the friend of the court - the SA Institute for Race Relations - for their services until Thursday.
They also had to pay costs encountered because of a postponement of the matter on May 5, and the costs of all interlocutory applications filed on record.
Crawford-Browne could not say what it had cost so far as he was being represented on a contingency basis by two lawyers - Paul Hoffman and Charles Abrahams.
Originally, Crawford-Browne's questions on the deal were being raised through Economists Allied for Arms Reduction, an organisation which advocates arms reduction as a way of attaining world peace and security.
That group can no longer assist international affiliates, he explained, so he carried on with the arms deal matter in his individual capacity.
He ran out of money, and in 2004 his lobbying "collapsed".
"Luckily my father-in-law forced my wife to get an ante-nuptial contract so now my wife feeds me," he quipped.
Crawford-Browne had initially approached the court to direct Zuma to appoint an independent commission of inquiry to investigate the deal, but it was postponed when it was originally set down for May 5.
When Zuma announced in September that a commission of inquiry would be set up, Crawford-Browne said he was unhappy with aspects of it, and would push ahead with his Constitutional Court action.
He said there were problems regarding the issue of offset payments to civilians. His attorney later informed the court that he and the respondents had settled the matter.
Thursday's proceedings were to formally withdraw Crawford-Browne's application and to make the costs order. Crawford-Browne said he would continue to lobby for the cancellation of the deal.
Presidency spokesperson Mac Maharaj preferred to comment after he had seen the order made by the court.
Details were not immediately available on whether the two-year inquiry had begun its work yet.
The commission would be headed by Judge Willie Seriti and would have powers of search and seizure, would hold public hearings and be able to compel witnesses to answer questions.
The controversial deal was signed on December 3 1999 and was then expected to cost R30bn.
On September 9 of that year politician Patricia de Lille tabled a document alleging kickbacks.
On June 14 2005 Zuma was "released" as then deputy president. This was in response to his former financial adviser Schabir Shaik being found guilty of fraud and corruption in a case which involved allegations Zuma himself had received a kickback from the deal.
Zuma's sacking set off a chain of events that eventually led to former president Thabo Mbeki stepping down amid allegations that there was a political conspiracy against Zuma.
At that time Zuma faced his own deal-related corruption charges, along with French arms company Thint.
On November 1 this year, Zuma, who became president in 2009 after the charges were dropped, said he would testify at the inquiry, if asked.