The network, which is owned by media magnate Rupert Murdoch and his family, has agreed to pay Dominion $787.5 million (£634 million).
While the settlement is substantial, it means Fox avoids what some have called the “defamation trial of the century.”
However, the network is facing a second, similar complaint from Smartmatic, another election technology provider.
The deal allows Fox and Dominion to put the dispute behind them, with both companies claiming triumph.
“The reality is that two large companies, in this case, are risk averse by nature.” And any time you have a jury, it’s risky,” said David Logan, a law professor at Roger Williams University, to the BBC.
At nearly $800 million, it is one of the largest cash settlements in a slander case ever.
“It’s obviously a large number, and we shouldn’t dismiss it.” “I mean, it’s a huge number,” Angelo Carusone, president of the left-wing media watchdog Media Matters for America, told the BBC.
It is, however, less than half of the $1.6 billion demanded by Dominion.
“However, the number isn’t large enough to change Fox News’ behavior on its own,” Mr Carusone continued.
To put the dividend into context, Fox Corporation reported a net income of $1.23 billion in the previous fiscal year.
According to recent corporate filings, it also has substantial cash reserves of roughly $4 billion.
According to Forbes magazine, Rupert Murdoch and his family, who own the News Corp media empire that includes Fox News, The Times of London, and The Wall Street Journal, are worth $17.6 billion.
The agreement also exempts Fox officials, including Mr. Murdoch, and some of the network’s anchors from testifying in one of the most high-profile defamation prosecutions in history.
“Fox was going to have to deal with another round of embarrassing revelations,” Professor Logan predicted.
The company’s legal team may have also considered the financial implications if the case went through and Dominion won.
It is still facing a second, identical defamation case from another electoral technology firm, Smartmatic, for $2.7 billion.
However, Fox will not be able to put the problems with its 2020 presidential election coverage behind them just yet.
The $787.5 million Fox settlement could be just the beginning for Dominion.
It still has cases pending against Fox’s smaller competitors Newsmax and OAN, as well as numerous of former President Donald Trump’s cronies.