Purchasers of BHP American Depositary Receipts between September 2014 and November 2015 took the action in relation to the Samarco dam failure on November 5, 2015 against the company and some current and former executive officers and directors.
BHP attempted to dismiss the punitive action under US securities law but was only partially successful in August 2017, and the action has continued for the past year with the plaintiffs seeking unspecified damages.
The settlement now needs to be approved by the court.
This morning BHP also confirmed that it, Samarco partner Vale, the Brazil government, Espirito Santo and Minas Gerais states, and various Brazil legal authorities have had a governance agreement formally ratified in the Federal Court of Minas Gerais.
The June deal dismissed a BRL20 billion (A$7.2 billion) civil claim in favour of what BHP described as a framework agreement to enhance "community participation in decisions related to the remediation and compensation programs" via the establishment of a clean-up and remediation fund, the Renova Foundation.
It also formalises a process to renegotiate the programs over two years and to progress settlement of a larger BRL155 billion civil claim for social, environmental and economic compensation.
The fallout from the failure of the Fundao tailings dam, which killed 19 people, left hundreds homeless and dumped tailings into major waterways in what was described as Brazil's worst environmental disaster, is far from over.
Around 400,000 people are expected to be entitled to compensation for interruption to water supplies along the Rio Doce alone and more than 14,000 families have registered for compensation for other damages such as property loss or business impacts.
BHP also faces another class action by disgruntled shareholders in the Federal Court in Australia, with around 3000 investors alleging the miner ignored issues with the dam in the years before the disaster, breached continuous disclosure obligations and engaged in misleading and deceptive conduct.
BHP posted a $US2.2 billion loss for the impact of Samarco in 2016 and it has been estimated the impact of the mud slide would strip about 4% from BHP's profits.
Vale recently flagged it would record a charge of US$440 million in its full-year financial statements next month relating to the Samarco dam failure.
BHP shares were trading around $34 in Australia today, valuing the company at $172 billion. Its shares have risen from levels around $18 at the time of the disaster.