Alisdair MacDonald announced an intention to sue The ABC over its mini-series Paper Giants: The Birth of Cleo last month, claiming that he was portrayed as "selfish and irresponsible" and willing to abandon his pregnant wife and child.
He additionally claimed that the broadcaster did not contact him to check its facts before the two-part drama aired.
The Sydney Morning Herald reports that an agreement was reached following court-ordered mediation.
A spokesperson for The ABC confirmed that the parties had reached an agreement, but stressed that it was confidential.
MacDonald had one son and one daughter with Cleo magazine founder Buttrose. They married in 1963 and divorced in 1976.
The couple were portrayed by Asher Keddie and Nathan Page in Paper Giants. Keddie won an AACTA Award for her performance earlier this year.
Watch a trailer for Paper Giants: The Birth of Cleo below: