Addressing a press conference jointly with the photographer Sandeep Roda, Jaiin said the consent terms would be filed by them in the court and the case withdrawn.
Jain had filed a case against Roda alleging that he was blackmailing her at the instance of Bhandarkar.
A statement issued by Roda tendering an apology was also released at the press conference.
Roda's apology comes a day before the trial was to commence in a metropolitan magistrate's court.
Roda alleged his statements had been manipulated by Bhandarkar to his advantage and added "I am planning to sue him (Bhandarkar) in near future. I have utmost respect for Pretti Jaiin and I am tendering my sincere apology for defamation and agony caused to her because of such manipulated statements."
"Pretti has never blackmailed me. She has never threatened me in any manner whatsoever. My statements in the media have been manipulated by Bhandarkar for his personal benefit at the time of pendency of his anticipatory bail plea in sessions court in July 2004 in a case filed by Preeti against him on charges of rape," Roda said.
Jaiin had created a stir when she filed a police complaint two years back alleging that Bhandarkar had raped her by giving her false promises to offer her lead roles in films. Bhandarkar denied the charges and secured anticipatory bail from a local court.