The detective who was unmasked as the NightJack blogger after a journalist from The Times allegedly hacked into his emails is to receive £42,500 in damages.
Richard Horton sued after being exposed as the author of the NightJack blogs which detailed the challenges of working as a police officer in Lancashire and which in 2009 won the Orwell Prize.
Times Newspapers has agreed to pay the damages and to pay Mr Horton's legal costs after he sued for breach of confidence, misuse of private information and deceit.
In a statement to the New Statesman, Mr Horton said: "I am happy to have settled with The Times and I can now put that incident behind me and get on with my life."
In August, a journalist was arrested on suspicion of conspiracy to pervert the course of justice, and offences under the Computer Misuse Act.
In 2009 the newspaper successfully challenged in court before Mr Justice Eady an injunction preventing the naming of Mr Horton. The paper argued that it had identified him through legitimate journalistic means.
James Harding, the newspaper's editor, was later forced to issue an apology after it was revealed that senior figures at The Times had failed to disclose that they knew about the alleged computer hacking when the injunction hearing took place.
"I am sure Mr Horton and many other people expect better of The Times and so do I," he told the Leveson Inquiry. "So on behalf of the paper, I apologise."
Alastair Brett, the newspaper's former legal chief, was criticised at the inquiry when he admitted he had made a mistake by failing to reveal he knew about the alleged hacking before the court hearing.