The Shawshank Redemption star, who broke his arm and shoulder in the crash, was facing a court date with his passenger Demaris Meyer next year (10), but he has chosen to settle instead.
Meyer filed a lawsuit in February (09), alleging the actor had been drinking alcohol in the hours leading up to the crash, which happened in Mississippi last August (08).
She claimed she sustained a broken wrist, a torn labrum in her shoulder and various other bruises and lacerations.
Meyer, who owned the crashed vehicle Freeman was driving, sued for damages to cover medical expenses, lost wages, pain and suffering.
The settlement details have not been released.