Lawsuit accuses the company of concealing that involvement with a controversial surveillance led to loss of sales and stock price decline.
The company can now buy back Vivendi's shares without holding a shareholder vote on the matter.
The company says the shareholder vote over founder Michael Dell's plan to take it private will take place next week.
The settlement should clear the way for the Web giant to issue a new class of nonvoting shares, ensuring that the founders' majority control isn't diluted.
Vivendi's $8.2 billion sale was all set to go before a shareholder filed suit requesting a vote on the matter.
A pre-summer gathering of stockholders will put Mark Zuckerberg and company in the hot seat.
It's been exactly one year since Marissa Mayer became Yahoo's CEO, and her company's shares are up 74 percent.
The judge hearing arguments over a proxy proposal says he sees merit in case, but he does not immediately issue a ruling on whether to block the shareholder vote.
Lawsuits against the Farmville-maker are beginning to pile up with allegations of executives keeping slumping revenue and user growth a secret.
The founder of PC maker Dell, along with partner Silver Lake, promise to pay $13.75 per share to take the company private.