"The Virginia Alpha Chapter of Phi Kappa Psi fraternity has agreed to settle and dismiss its defamation lawsuit against Rolling Stone and Sabrina Erdely arising from the magazine’s publication of the November, 2014 article A Rape on Campus: A Brutal Assault and Struggle for Justice at UVA," the fraternity said in a statement.
Rolling Stone agreed to pay a settlement of $1.65 million, The Associated Press reported.
The story, which was later retracted, centered around “Jackie,” a young woman who was allegedly gang-raped at the Virginia Alpha Chapter of Phi Kappa Psi fraternity house weeks into her first year at school.
"It has been nearly three years since we and the entire University of Virginia community were shocked by the now infamous article, and we are pleased to be able to close the book on that trying ordeal and its aftermath," the statement continued.
The fraternity said that a "significant portion" of the $1.65 million will go to organizations that work to prevent sexual assault, and treat victims of sexual violence.
"The chapter looks forward to donating a significant portion of its settlement proceeds to organizations that provide sexual assault awareness education, prevention training and victim counseling services on college campuses," the statement said. "Individual members of the chapter will not conduct media interviews at this time."
Rolling Stone magazine did not immediately respond to ABC News' request for comment.
ABC News' Eamon McNiff, Lauren Effron and Jeff Schneider contributed to this report.