The deal described in a court filing Tuesday in New York avoids a trial that would have brought further embarrassment to the monarchy. It calls for the prince to make a substantial donation to the charity of his accuser while saying he never meant to malign her character.
Attorney David Boies, who represents Giuffre, informed the judge presiding over the case in New York that a settlement in principle has been reached and lawyers on both sides will request a dismissal of the lawsuit within a month.
A lawyer for Andrew did not immediately return a message seeking comment. While Buckingham Palace declined to comment on the matter, according to Reuters.
The letter signed by Boies said all lawyers were asking the judge to suspend all deadlines and put the case on hold.
Andrew has strenuously denied Giuffre's allegations and attempted to get the lawsuit tossed.
Attached to the letter by Boies was a statement that read: "Virginia Giuffre and Prince Andrew have reached an out of court settlement. The parties will file a stipulated dismissal upon Ms. Giuffre's receipt of the settlement (the sum of which is not being disclosed).
"Prince Andrew intends to make a substantial donation to Ms. Giuffre's charity in support of victims' rights. 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.
According to the statement, Prince Andrew acknowledged that Epstein trafficked "countless young girls" over many years and said the prince "regrets his association with Epstein, and commends the bravery of Ms. Giuffre and other survivors in standing up for themselves and others."
He also pledged to support the victims of sex trafficking as part of demonstrating his regret.
The decision was an effort to insulate the House of Windsor from the fallout from potentially years of sordid headlines if the suit moved forward.
"With The Queen's approval and agreement, The Duke of York's military affiliations and Royal patronages have been returned to The Queen," the palace said, using the prince's formal title. "The Duke of York will continue not to undertake any public duties and is defending this case as a private citizen."
The move came after 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" that are expected of British officers.
Giuffre asserted that she met Andrew 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 Andrew. Her lawsuit said she still suffers significant emotional and psychological distress and harm.
Andrew repeatedly denied Giuffre's allegations and has said he can't recall ever meeting her.
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.
He has spent years combating concerns about his links with Epstein, the U.S. financier who took his life at age 66 in 2019 in a Manhattan federal lockup while awaiting trial on child sex trafficking charges. Epstein's longtime companion Ghislaine Maxwell was convicted of related charges last month.
The Associated Press does not typically identify people who say they are victims of sexual assault unless they choose to come forward publicly, as Giuffre has.