Federal Judge S. Arthur Spiegel dismissed Dez Wells' lawsuit against Xavier on Thursday, saying the two had resolved their conflict.
Wells' attorney says the settlement terms are confidential and declined to comment further. A university spokeswoman declined to comment.
Wells' lawsuit accused the school and its president, Father Michael Graham, of damaging his reputation by expelling him over a student's 2012 rape allegation.
The student later declined to press charges, and a grand jury declined to indict Wells after hearing evidence.
Wells claims the university used him as a scapegoat to demonstrate an aggressive response to rape allegations.
Wells, a junior guard and forward, played for the University of Maryland the last two seasons. He started all but one game this past season and led the team in scoring with 14.9 points per game.