A California city has dropped its threat to close a factory that makes famed Sriracha hot sauce, after months of haggling over residents' complaints about pungent smells.

The city of Irwindale outside Los Angeles took legal action in October to close Huy Fong Food's facility, saying the company should be forced to improve odor-filtering measures.

In November, a judge ordered the hot sauce maker to cease any operations that could cause smells, and take immediate steps to reduce the overpowering odors. The ruling, however, allowed the factory to continue operating.

City lawmakers voted unanimously late Wednesday to drop the lawsuit, after the firm's boss promised to address without delay any future complaints about odor.

The company recently upgraded its rooftop air filtration system, according to the local Pasadena Star-News newspaper.

Chili harvesting and grinding -- the process which produces the powerful aromas -- is done over a three-month period which reaches its peak in October.

Company boss David Tran promised that this year "if the air filtration system does not perform well, then Huy Fong Foods will make the necessary changes in order to better the system right away," the newspaper reported.

Other US states including Arizona and Texas had offered to provide a new home for Huy Fong Foods.

Sriracha sauce, of which Huy Fong Foods is the biggest producer in the United States, takes its name from the town of Si Racha in Thailand, where the hot sauce was first produced.