The privacy case forced Gawker to declare bankruptcy earlier this year, after a jury awarded Mr Hogan $140m over a leaked sex tape.
Mr Hogan's legal bill was paid by tech billionaire Peter Thiel, who said he wanted to curb Gawker's "bullying".
Gawker shut down in August following the judgement.
The website, launched in the early 2000s, was known for its acerbic tone and aggressive coverage of celebrities.
The case involved a video posted by Gawker in 2012 after Mr Hogan was secretly recorded having sex with his friend's wife.
The settlement was announced on Wednesday in a blog post by Gawker founder Nick Denton, who called the conclusion of the case "a hard peace".
He said the company and staff were confident the appeals process would reduce the judgement against Gawker, but that "all-out legal war would have cost too much, and hurt too many people, and there was no end in sight."
Mr Denton also said that as part of the settlement, three "true stories " would be "removed from the
Mr Thiel co-founded PayPal and was an early stakeholder in Facebook.