In a last-minute deal, US voting technology firm Dominion has settled with Fox News just before their defamation trial was due to begin.
Dominion had sought $1.6bn (£1.3bn) from Fox, arguing the network spread falsehoods about its voting machines in the 2020 presidential election.
The final settlement agreed between both parties was for $787.5m.
The deal spares Fox's top executives, such as chairman Rupert Murdoch and anchor Tucker Carlson, from testifying.
In a statement, Fox said Tuesday's settlement in one of the most anticipated defamation trials in recent US history reflected its "commitment to the highest journalistic standards".
Dominion chief executive John Poulos told a press conference the deal included Fox "admitting to telling lies, causing enormous damage to my company".
Opening arguments in the case had been due to begin on Tuesday afternoon.
The announcement of a settlement came after an unexplained delay of several hours once jury selection had finished, prompting speculation that talks were underfoot behind the scenes.
On Monday, Delaware Superior Court Judge Eric Davis announced that the start of the trial would be delayed by 24 hours.
Although he gave no reason, US media reported that it was to give both sides an opportunity to reach a settlement.
On Tuesday morning, however, both sides appeared to be digging in for a lengthy trial.
Ahead of the trial, attorneys for Fox repeatedly objected to the $1.6bn in damages that Dominion was seeking, and characterised the figure as massively inflated.
Watch: The Fox News defamation lawsuit explained in 90 seconds
The "real cost" of the case, Fox said, would be the "cherished" rights to freedom of speech and of the press enshrined in the First Amendment of the US Constitution.
Dominion's lawsuit argued that the conservative network had sullied the electronic-voting company's reputation by airing falsehoods about the 2020 vote being stolen from former President Donald Trump.
Legal findings released ahead of the trial suggested that a number of Fox executives and journalists privately questioned conspiracy claims that the 2020 presidential election was stolen, but still put them on air.
In one series of text messages, host Carlson said some of the claims were both "absurd" and "insane", while another host, Sean Hannity, said privately he did not believe them "for one second".
Fox has said the words were taken out of context.
Ahead of the trial, Judge Davis ruled that the claims against Dominion had already been proven false.
A good outcome for Fox?
Despite the mammoth pay-out, some legal experts believe the settlement was overall a positive outcome for the network.
Syracuse University professor and First Amendment expert Roy Gutterman said that Fox "was facing even more public scrutiny of its post-election coverage and what went into its news operation".
"Looking down the line at a six-week trial, this was going to be gruelling for everyone involved and likely embarrassing for Fox," he said.
"But a verdict against Fox could have been even costlier, and had serious implications on subsequent rulings on the actual malice standard and the First Amendment itself."
Civil litigation attorney Michelle Simpson Tuegel told the BBC that the settlement "speaks to the massive threat Fox saw from this litigation".
"It's hard to say how damaging a decision against Fox would have been for the company beyond the financial cost of the verdict, because their audience is very loyal," she said.
"But the reputational harm of having executives, including chairman Rupert Murdoch, and hosts take the stand seems to have moved the parties towards a resolution," Ms Tuegel added.
Fox still faces a second, similar defamation lawsuit from another election technology firm, Smartmatic, which is seeking $2.7bn.
Dominion has also signalled a willingness to take legal action against others.
The company's attorney, Stephen Shackelford, told reporters that it is "not done yet".
"We have some other people who have some accountability coming toward them," he said.
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