Instead, the team will donate to several charitable groups that support gay rights, implement sensitivity training within the organization and set up a national symposium on LGBT tolerance in Minneapolis next year.
Kluwe will receive no money from the settlement.
"This has never been about money," Kluwe said Tuesday as part of a series of tweets.
The Vikings confirmed the resolution of the matter Tuesday with a statement on their website.
"As a family we have long supported equal-rights causes, including marriage equality," Vikings owner and President Mark Wilf said. "We are glad a resolution of this matter has been reached, and we look forward to continuing our efforts to create positive awareness of these issues."
In a letter posted on Deadspin in January, Kluwe alleged several instances of anti-gay conduct by special teams coordinator Mike Priefer after the punter started publicly voicing support for gay rights. An internal investigation found that Priefer had made anti-gay comments during practice but that Kluwe had not been wrongfully terminated.
But Kluwe alleged that the Vikings had released him based on his pro-gay views and threatened to sue the team for discrimination if it didn't release the full 150-page report from the investigation. He tweeted Tuesday: "No, the report won't be made public. Our worry there was that there were systemic problems being covered up, but there weren't."
He continued in two more tweets: "Then it became, do I want this to be about me? (And prove the haters right) Or do we try to do a lot of good for a lot of other people. We've chosen to help those who need it, in a way that hopefully will set an example moving forward for others to follow."