A lawyer for Jabbar Collins said a judge approved the settlement on Thursday.
Collins was exonerated in 2010 after serving 15 years in prison. His 1995 conviction was overturned based on new findings that witnesses gave false testimony and prosecutors withheld favorable evidence from the defense.
The $3 million settles an unjust conviction claim brought against the state.
There's a second case in federal court accusing authorities of violating Collins' civil rights that's scheduled to go to trial in the fall.
Collins steadfastly maintained his innocence while imprisoned, spent years studying the law while behind bars and filed freedom of information requests on his case.