In the 2010 suit, Fernando Flores claimed that the pop diva would intentionally drop her cigarette lighter when he was around so she could bend over to pick it up and thereby entice him, reported TMZ.
Now, according to court documents, Spears, 30, and Flores agreed to end their two-year legal war.
"She coughed up a modest financial settlement just to make the case go away. We're told the settlement was amicable... But the money didn't even cover all of Flores' legal costs," a source said.
As Spears is under a conservatorship, the alleged settlement will have to be approved by a probate court before the deal goes through.