Former Cabinet minister Tessa Jowell has accepted £200,000 in damages after her phone was targeted by the News of the World.
The Labour MP's lawyers said News Group Newspapers had agreed to pay £100,000 of the settlement direct to a charity of her choice.
Solicitor Tamsin Allen, of Bindmans LLP, said the terms included "an ongoing obligation to disclose documents".
"News Group has agreed to pay damages in the sum of £200,000, £100,000 of which will be paid directly to a charity which she has supported for some time," Ms Allen said.
"The payment will be registered with the appropriate parliamentary authorities on receipt.
"She will continue to cooperate fully with the Metropolitan Police investigation and as a core participant in the Leveson Inquiry.
"Her concern has always been to ensure a transparent investigation so that the truth about phone hacking should emerge in full and she is confident that will now happen."
The substantial settlement for breach of privacy and harassment was announced after police told Ms Jowell her mobile phone had been hacked "wholesale". It is expected to be formalised by the courts shortly.
Ms Jowell's phone was apparently targeted in 2006 when her estranged husband, David Mills, was mired in controversy over his links to former Italian prime minister Silvio Berlusconi.
The ex-Olympics minister - now shadowing the brief - told the Independent she had received an apology from Rupert Murdoch's News International.
"I was very extensively hacked - 'wholesale', as it was put to me," she said. "It was quite clear it was wholesale as there were things no one else should have known. It makes you feel like you're going mad. It made me feel like I couldn't trust anyone at the time."
Details of the deal emerged after former Cabinet colleague David Blunkett accepted a "substantial" settlement for the hacking of his phone.
Mr Blunkett resigned as home secretary in 2004 after the News of the World published details of his affair with Kimberly Fortier. He has refused to reveal the level of the settlement.