Former Police Ombudsman Baroness Nuala O'Loan is to receive substantial libel damages from the Democratic Unionist Party chairman of the Stormont Justice Committee.
Paul Givan also issued an unreserved apology for comments he made in a live television interview which questioned her integrity and impartiality during her time in office.
The resolution was confirmed at the High Court in Belfast after a jury had been sworn in.
Baroness O'Loan, who served as Northern Ireland's first Police Ombudsman between 1999 and 2007, sued over a broadcast on UTV Live 18 months ago.
Although liability was accepted, a jury of four men and three women were due to decide the level of damages at a hearing set to last for up to three days.
But following further negotiations, Mr Justice Gillen was told a settlement had been reached.
An unreserved apology was read out in court on behalf of Mr Givan and the second defendant, UTV Media Plc.
Outside the court, Baroness O'Loan said: "This was necessary to protect the integrity of the office.
"I'm just pleased it's been settled and the integrity of the work we conducted and my own integrity has been vindicated."