Oracle previously asked for $8.8 billion in damages.
Labor Department says the company "channeled" women and people of color into lower-paying careers at the software maker.
The decision comes after a federal appeals court declined to rehear the case.
Oracle says the lawsuit is politically motivated. The Department of Labor notes that government contracts could be at stake.
Commentary: George Polisner publishes his resignation letter on LinkedIn, with unkind words for the president-elect.
President-elect Donald Trump tries to make a fresh start with tech leaders, assuring them he planned to continue helping them succeed.
Summit is expected to help patch up relations between tech leaders and the president-elect.
The private company was at the center of a massive internet attack in October that knocked dozens of popular websites offline.
Oracle -- whose CEO Larry Ellison was NetSuite's first and biggest investor -- sees midsize customers in its future.
The business-software maker worked with the White House to donate $200 million to support computer science education in the US. Now it's adding even more to focus on women's education.
Oracle's plan to cash in on Android now depends on whether Google knowingly used Java code without a license.
The decision curtails Google's efforts to avoid paying Oracle licensing fees for using Java code in the Android mobile operating system.
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