Zach Petrou was taken into Stepping Hill hospital in Greater Manchester as a healthy seven-month old baby by his mother with the viral infection croup in 1994.
Zach is now a fully mobile 19-year-old, but functions at the level of a six to eight month old baby. He requires a minimum of two full time carers 24 hours a day.
The hospital has not accepted liability but has agreed to settle the family's medical negligence claim at Manchester High Court, the BBC reported.
His parents alleged he was deprived of oxygen during treatment in 1994.
Croup is a treatable and common viral infection. But Zach's condition deteriorated and he was placed on an emergency ventilator. When he was taken off the ventilator he was found to be profoundly brain damaged.
The boy's father Andros said: "We have been left devastated by what happened to Zach.
"We lost our son in 1994 at seven months of age, his future was taken away from him at that point.
"Zach went into the hospital a healthy baby boy but was given back to us severely brain damaged," Andros said.
This means the settlement figure will potentially be one of the largest ever in the UK, solicitor Diane Rostron said.
A team of experts will now look at exactly how much Zach's care for the rest of his life will cost, before a figure is agreed.
Rostron said: "I hope this settlement will help secure the lifelong care package that Zach needs and at the same time provide a little bit of freedom for Mr and Mrs Petrou."
Petrou said: "We were forced to go down the legal route just to get justice for our son.
"We still believe that what happened to Zach should never have happened and we hope that it never happens to another family again."
