Jo Wells, 38, was at the party on board the pleasure cruiser when it collided with the sand dredger the Bowbelle in August 1989 killing 51 people.
The High Court in London heard how she had toured the world with pop groups Tears for Fears and the Communards before the accident. Pete Townshend, of The Who, described her as "exceptional" and said she was "certainly the best soprano saxophonist I have ever heard in pop".
But after the accident in which she almost drowned, she suffered severe depression and had not been able to resume her music, it was claimed. Instead of earning an estimated pounds 40,000 a year or more if she had gone on to a successful solo career, she had been reduced to working as a cleaner.
The owners of the Bowbelle and the Marchioness admitted liability but there was a dispute about the amount of damages. They initially claimed she had been burnt out before the accident and would have been unlikely to have further success. They also questioned what she had actually earned at the time, pointing to a lack of documentary evidence to prove it.
But at a resumed hearing in the High Court in Preston yesterday, Mr Justice Kay approved an agreed settlement of pounds 150,000 damages plus costs.
The earlier hearing had heard how Ms Wells, of Salford, Greater Manchester, had been regarded as a "star" at the prestigious Chethams music school in Manchester. She beat 10,000 other young musicians to win a scholarship to the Royal College of Music, London, with her then instrument, the clarinet. But she had left her studies to launch a pop career with the band Kissing the Pink, before enjoying significant success with Tears for Fears and the Communards.
Michael Redfern QC, her counsel, said she had developed post-traumatic stress disorder which affected her concentration after the accident in which her cousin died.
She had begun and then dropped out of a university course and binged on bottles of Scotch as she tried to come to terms with the tragedy. Ms Wells said she drank "to numb the feelings and sense of loss".
A jury at a coroner's court in 1995 decided the 51 victims had been "unlawfully killed" when the Bowbelle struck the stern of the Marchioness near Southwark Bridge on 20 August 1989. The pleasure boat's upper deck was ripped away, killing many people who were on the dance floor downstairs when the collision happened. Survivors and relatives of victims claimed that those responsible for the disaster should face manslaughter charges for a "hit and run accident" in which the Bowbelle broke maritime rules. But the Crown Prosecution Service decided last year that no criminal charges would be brought.