Pop singer turned Muslim activist Yusuf Islam, formerly Cat Stevens, said he had obtained "substantial" damages against two British newspapers which alleged he had been involved in terrorism.
In a statement released on his behalf, the 56-year-old, who sold 50 million records in the 1960s and 1970s, said he had also received apologies for the "false and highly defamatory allegations".
The dispute was sparked by reports in the Sunday Times and Sun newspapers following the decision by US authorities in September 2004 to refuse Islam entry to the United States, on what was termed "security grounds".
Islam, who gave up music and changed his name 30 years ago when he embraced the Muslim faith, has repeatedly denied any involvement in terrorism, or terrorist funding.
Islam's settlement with the two papers saw them also agree to pay his legal costs and pledge not to repeat the allegations, his statement said.