An official familiar with the deal said Tuesday that Omar Khadr will receive 10.5 million Canadian dollars (US$8 million).
The official was not authorized to discuss the deal publicly before the announcement and spoke on condition of anonymity. The government and Khadr's lawyers negotiated the deal last month.
The Canadian-born Khadr was 15 when he was captured by US troops following a firefight at a suspected al-Qaida compound in Afghanistan that resulted in the death of an American special forces medic, US Army Sgt. First Class Christopher Speer. Khadr, who was suspected of throwing the grenade that killed Speer, was taken to Guantanamo and ultimately charged with war crimes by a military commission.
He returned to Canada two years later to serve the remainder of his sentence and was released in May 2015 pending an appeal of his guilty plea, which he said was made under duress.
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Omar Khadr spent 10 years in Guantanamo Bay. His case received international attention after some dubbed him a child soldier.
The Supreme Court of Canada ruled in 2010 that Canadian intelligence officials obtained evidence from Khadr under "oppressive circumstances," such as sleep deprivation, during interrogations at Guantanamo Bay in 2003, and then shared that evidence with US officials.
His lawyers filed a $20 million wrongful imprisonment lawsuit against the Canadian government, arguing the government violated international law by not protecting its own citizen and conspired with the US in its abuse of Khadr.
Canadian Prime Minister Justin Trudeau declined to confirm the apology and money when asked about in Ireland today.
"There is a judicial process underway that has been underway for a number of years now and we are anticipating, like I think a number of people are, that that judicial process is coming to its conclusion," Trudeau said.
"Settlement processes are always strictly confidential by nature. Accordingly, the Government is not in a position to provide any comment one way or another," Bardsley said in an email.
The widow of Speer and another American soldier blinded by the grenade in Afghanistan filed a wrongful death and injury lawsuit against Khadr in 2014 fearing Khadr might get his hands on money from his $20 million wrongful imprisonment lawsuit.
A US judge granted $134.2 million in damages in 2015, but the plaintiffs acknowledged then that there was little chance they would collect any of the money from Khadr because he lives in Canada.
After his 2015 release from prison in Alberta, Omar Khadr apologized to the families of the victims. He said he rejects violent jihad and wants a fresh start to finish his education and work in health care. He currently resides in an apartment in Edmonton, Alberta.
The news of the government giving millions to someone who pleaded guilty to killing a US soldier has caused a stir in Canada.
Former Liberal leader Bob Rae tweeted that compensation was "long overdue.