68-year-old Vernon Hunter was the only IRS employee who died when Joseph Stack targeted the IRS offices in Northwest Austin on Feb. 18 2010.
Stack also died when he crashed his single-engine plane into the building, but left behind a message ranting against the IRS.
Austin attorney Dan Ross represents Vernon Hunter's family and his widow, Valerie.
He said Wednesday the settlement is confidential and the money will come from insurance funds and not from stack's estate.
Hunter's family filed the lawsuit several days after the crash.