Plebgate officer Toby Rowland has accepted £80,000 in damages after he sued Conservative MP Andrew Mitchell for libel.
The former Metropolitan Police officer sued Mitchell after the former government whip said he was lying over claims he called the police officer a "pleb" outside Downing Street in September 2012.
Neither Mitchell nor Rowland were at the High Court today (4 March) when it was announced the settlement had been made.
Rowland's solicitor said: "The payment of £80,000 damages by Mr Mitchell sets the seal on PC Rowland's vindication, as well as providing compensation for the injury to his reputation and the distress caused to him and his family over many months."
The saga, which cost Mitchell his job as Conservative chief whip, started when he had a row with police officers who would not let him cycle through Downing Street's entrance gate.
It was reported he called one of intervening officers a "pleb", refuted by the Sutton Coldfield MP.
He resigned one month later after a meeting with members of the Police Federation union who told reporters Mitchell suggested the Downing Street officers had made up their account.
A Channel 4 investigation cast doubt on the veracity of their claims after CCTV showed no one was within earshot of the dispute, even though an officer said members of the public were "shocked" by the incident.
Rowland launched a libel action against Mitchell in December 2013 over comments he made to the media following the incident. It was reported he was seeking £200,000 in damages.