Some people staying at seven Motel 6 locations in the state were detained or deported, he said.
"Motel 6's actions tore families apart and violated the privacy rights of tens of thousands of Washingtonians," Ferguson said in a statement. "Our resolution holds Motel 6 accountable for illegally handing over guests' private information without a warrant."
The company has also implemented controls to ensure corporate oversight and compliance in cases where law enforcement requests are made.
"The safety and security of our guests, which includes protecting guest information, is our top priority, and we are pleased to be able to reach resolution in this matter," the company said.
The agreement applies to all Motel 6 locations nationwide. The company also agreed to provide training to employees to protect guest privacy, Ferguson said.
In a separate lawsuit filed in Arizona, the company agreed in November to pay up to $7.6 million to Latino guests who said hotel employees shared private information with immigration officials.
In Washington state, Ferguson said Motel 6 gave ICE information on a daily basis about a total of 80,000 guests without a warrant between 2015 and 2017.
The man was the sole provider for his family and his wife has struggled to support the children, he said.
In another case, a Vancouver father who had lived in the U.S. for more than 20 years was detained after staying at a Motel 6 on a trip to pick up supplies for his grocery business, Ferguson said. He also was deported, leaving behind his wife and six children.
Ferguson filed the lawsuit in King County Superior Court last year, claiming the company's disclosures violated the state's Consumer Protection Act and a law against discrimination.
The company must also create an online tool for guests to report incidences where they believe the hotel chain has shared guest information.