Court documents show that Los Angeles-based Riot Games will pay about 1,000 current and former female employees who worked at the company in the last five years.
The lawsuit claimed the company paid women less than men, passed them over for promotions and fostered a bro culture that excluded them.
The lawsuit said that culture led to sexual harassment and misconduct. Allegations of misconduct against women have plagued the video game industry for years.
Riot Games, which is owned by Chinese internet giant Tencent, did not immediately respond to a request for comment.
The court is expected to confirm the settlement this week.