The deal, reached after closed-door negotiations before U.S. Magistrate Judge Cheryl L. Pollak in Brooklyn, will not require the seven-time Cy Young Award winner to contribute any money or release any claims against ex-trainer Brian McNamee, attorneys for both men said.
McNamee sued Clemens for defamation in 2008 after the pitcher said McNamee lied and manufactured evidence when he accused Clemens of using banned performance-enhancing drugs. The case was moved to federal court the following year.
Clemens didn't attend the settlement talks. His attorney Chip Babcock was disappointed he didn't get to try the case.
"And so is Mr. Clemens," he said.
McNamee's attorney Richard Emery said the agreement was fair and allowed everyone involved to move on.
"At this point it's water over the dam," he said. "It's high time. This is old news these days."
A spokesman for AIG, the insurer backing Clemens' homeowner's insurance policy, declined to comment.
That lawsuit alleged Clemens pursued a public-relations attack against McNamee after the onetime strength coach told federal agents and Congress he routinely injected the hard-throwing right-hander with steroids and human growth hormone from 1998 through 2001.
Clemens, who pitched until he was 45, has denied the charges and told ESPN McNamee's case was an example of "somebody out there that is really crawling up your back to make a buck."
Clemens, who also played for the Toronto Blue Jays and the Houston Astros in his two-decade-long career, was found not guilty in 2012 of charges of obstructing Congress, making false statements in a deposition and committing perjury when he denied using steroids or human growth hormone injected by McNamee.
On Wednesday, McNamee told reporters the deal hadn't sunk in.
"I got to digest this," he said. "I got to go home and have a good meal. Let me sit with it."