Terms of the deal are confidential.
The US lawsuit stemmed from a May 2011 hotel suite encounter.
It also triggered criminal charges, forced Mr Strauss-Kahn's resignation from the IMF and cut off his potential candidacy for the French presidency.
The criminal case was dropped after prosecutors said his accuser, Nafissatou Diallo, had credibility problems. She said she always told the truth about the encounter.
Mr Strauss-Kahn called her suit defamatory and countersued for one million dollars (£622,000).
His lawyers acknowledged late last month there had been settlement talks, though they dismissed as "flatly false" a French newspaper report that Mr Strauss-Kahn had agreed to pay six million dollars (£3.73m). Ms Diallo's lawyers declined to comment.
Both their lives have been upended since the day in May 2011 that she reported he forced her to perform oral sex and tried to rape her after she went to clean his room. He said the encounter was consensual.
Mr Strauss-Khan did not attend the New York hearing. Ms Diallo looked composed and resolute as the deal was announced.
"Ms Diallo is ready to move on," her lawyer Kenneth Thompson said afterward.