Marlene Pinnock, who was repeatedly punched in the face and head by a police officer at the side of the road, will receive $1.5 million in compensation.
Footage posted on YouTube in July 2014 shows a California Highway Patrol (CHP) officer straddling the woman and hitting her many times.
The settlement agreed on September 24 came after nine hours of talks between lawyers in Los Angeles.
A CHP statement said the officer, on leave since the incident, has resigned.
“When this incident occurred, I promised that I would look into it and vowed a swift resolution,” said the statement by CHP Commissioner Joe Farrow.
“Today, we have worked constructively to reach a settlement agreement that is satisfactory to all parties involved.”
The bulk of the money will go into a special needs trust for 51-year-old Marlene Pinnock, the CHP said.
Marlene Pinnock’s lawyer Caree Harper said the settlement secured the two things she wanted.
“One of the things we wanted to make sure of was that she was provided for in a manner that accommodated her unique situation in life, and that the officer was not going to be an officer anymore.”
Police had said the woman was endangering herself and motorists walking on the shoulder of a busy highway in the west of Los Angeles.
The incident was captured by passing motorist David Diaz, who said the officer arrived as the woman was walking off the highway, but he “agitated the situation”.
The officer is seen forcing her to the ground, briefly struggling with her before repeatedly punching her.
A few moments later, a plainclothes officer enters the picture and helps his colleague put the woman in handcuffs.
According to court documents, Marlene Pinnock suffered no signs of physical injury and refused medical treatment. She was placed under psychiatric supervision for two weeks.
“He grabbed me, he threw me down, he started beating me,” Marlene Pinnock told Associated Press news agency last month.
“I felt like he was trying to kill me, beat me to death.”
The officer could still face criminal charges.
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