The University of Salford confirmed that it had reached the settlement with Dr Tom McMaster. "The University has reached a settlement with Dr McMaster and we cannot comment further on this matter," said a spokeswoman.
Press reports have suggested that the University will face a further £100,000 in legal bills but the spokeswoman could not confirm that.
McMaster attended a conference in Galway and received permission from the university to sail his boat there from Liverpool instead of flying. He submitted a £180 expenses claim, which was rejected.
When McMaster followed up on the issue with the university's finance director, Ray Corner, Corner replied that "clearly the original claim was an attempted fraud and appropriately rejected. Those who submitted and certified it should be ashamed of themselves."
Corner included McMaster's four colleagues in the university business school in the reply, which opened the way for a libel claim.
McMaster told the Daily Telegraph newspaper that he had written back to Corner asking him to apologise but only when the allegations were repeated did he take legal action.
The High Court refused the university's application to have the case struck out as frivolous and the university settled the claim.
"I imagine this will have cost the university about £100,000, including legal fees. But I would have settled for a simple apology. I used to love my work," McMaster told the Telegraph.