A federal jury in Pittsburgh had awarded the boy's father, Michael Hickenbottom, more than $28 million, including $24 million in punitive damages.
Police attorneys appealed, arguing the punitive damages were excessive. The case was settled late Wednesday, according to online court records. The state admits no wrongdoing.
The boy, Michael Ellerbe, was unarmed when he was shot during the chase on Christmas Eve 2002 in Uniontown, about 40 miles south of Pittsburgh. The jury didn't believe two state troopers' claims that only one of them shot Ellerbe — and then only because the officer believed his partner had been shot by Ellerbe.
Michigan attorney Geoffrey Fieger, who represented Hickenbottom, did not return calls.
Peter Vaira, the Philadelphia attorney for troopers Juan Curry and Samuel Nassan, who remain on the job, declined to comment because of a confidentiality agreement.
The Associated Press obtained the eight-page settlement agreement Thursday from the Pennsylvania Office of General Counsel.
Internal state police investigators concluded that Nassan shot Ellerbe because he believed Ellerbe had shot Curry. In reality, Nassan had heard Curry's gun fire when its trigger snagged on a fence he was climbing, the troopers said.
Fieger contended both troopers shot at Ellerbe even though they were within grasping distance of him when the foot chase began and could clearly see he was unarmed.
Police claimed the boy was driving the stolen SUV before the foot chase, but Fieger cited witnesses who said they saw someone else at the wheel.