The firm was taken to court by Smirnoff firm Diageo in a passing-off case which began in 2008.
ICB said that in a final settlement of the dispute it would launch a new product to replace Vodkat in January or February 2011.
An ICB spokesman said: “Retailers can continue to sell existing stocks of Vodkat until the transition occurs at the end of January 2011.”
Diageo said ICB had agreed to CB has agreed to change the Vodkat name and packaging to ensure it was “clear to consumers that the product is not vodka”.
A “substantial” sum in damages and legal costs will also be paid.
Simon Litherland, managing director of Diageo GB, said: “We are pleased to have finally reached a settlement with ICB and that ICB has recognised that the use of the name Vodkat (or indeed any ‘Vod’ prefixed brand name) on a product that is not vodka is likely to confuse consumers.
“The original court decision and the decision of the Court of Appeal in July this year were important not only for Diageo but also for other vodka brand owners and producers, and for vodka consumers.
“They will ensure that the vodka category can be protected from other vodka lookalike products both now and in the future and should help protect the long-term integrity of the vodka market.”