A settlement has been reached in the civil case brought by Virginia Giuffre against Prince Andrew.
In a letter to the New York court handling the case, Ms Giuffre's lawyer David Boies said both parties had reached a settlement and expected to file for the case to be dismissed within 30 days.
The deal avoids a trial that would have brought further embarrassment to the monarchy.
Ms Giuffre, who lives in Australia, alleged she was trafficked for sex to the Duke of York by the late financier Jeffrey Epstein on several occasions when she was a teenager.
The duke repeatedly denied those allegations.
Lawyers for Ms Giuffre and Andrew said the duke intended to make a substantial donation to Ms Giuffre's charity in support of victims' rights.
It was not clear whether Ms Giuffre would personally receive any money as part of the settlement.
"Prince Andrew has never intended to malign Ms Giuffre's character, and he accepts that she has suffered both as an established victim of abuse and as a result of unfair public attacks," their statement said.
"It is known that Jeffrey Epstein trafficked countless young girls over many years.
"Prince Andrew regrets his association with Epstein, and commends the bravery of Ms Giuffre and other survivors in standing up for themselves and others."
Buckingham Palace declined to comment on news of the settlement.
Sources close to Prince Andrew said there would be no further statements on the matter at this time.
Ms Giuffre asserted that she met the duke while she travelled frequently with Epstein between 2000 and 2002, when her lawyers maintain she was "on call for Epstein for sexual purposes" and was "lent out to other powerful men," including the prince.
The tentative settlement comes just over a month after a US judge rejected the prince's attempt to win an early dismissal of the lawsuit, meaning depositions and other evidence-gathering could commence.
After the ruling, the duke — who had already stepped back from royal duties — was stripped of his honorary military titles and roles and leadership of various charities, known as royal patronages.
He also can no longer use the title "his royal highness″ in official settings.
Throwing himself onto a 'judicial grenade'
Andrew served in the Royal Navy for two decades, including as a helicopter pilot during the 1982 Falklands War.
The honorary military roles he lost included several overseas ones, such as his title as colonel-in-chief of the Royal New Zealand Army Logistic Regiment.
More than 150 veterans and serving members of the armed forces asked the Queen to strip her second son of his military titles, saying he had failed to live up to the "very highest standards of probity, honesty and honourable conduct" expected of British officers.
Mark Stephens, an international lawyer, said pressure from the royal family would have pushed Andrew to settle, particularly as Queen Elizabeth II celebrates her Platinum Jubilee marking 70 years on the throne.
The carefully worded settlement — in which Andrew admits only an unfortunate association with Epstein — allowed him to save face, Mr Stephens said.
"And I think he had no alternative but to settle because otherwise this case would have really overshadowed the Queen's Jubilee."
Mr Stephens estimated that Prince Andrew paid around $10 million to settle, using cash from the sale of a ski chalet.
He speculated that the cash would be split into three unequal portions between Ms Giuffre, her lawyers and charities.
Besides the settlement, Ms Giuffre gets to champion her support of abuse victims, and avoid having to relive "this whole experience in the public circus of a courtroom," he said.
"She's been vindicated in the sense that Prince Andrew acknowledges that she's a victim of sexual abuse."
At the heart of the case was the late financier and sex offender Jeffrey Epstein, a friend of Andrew's through his associate Ghislaine Maxwell.
Prince Andrew has repeatedly denied Ms Giuffre's accusations that he forced her to have sex more than two decades ago at Maxwell's London home, and abused her at Epstein's properties in Manhattan and the British Virgin Islands.
ABC/wires
