Lawyer Noor Blumer, acting for Ms Higgins, issued a brief statement on Tuesday.
"At a mediation held today, the Commonwealth and Ms Higgins settled her claims," Ms Blumer said.
"At the request of Ms Higgins, the parties have agreed that the terms of the settlement are confidential."
Earlier in December, Ms Higgins' civil action named three respondents in her action: Senators Linda Reynolds and Michaelia Cash as well as the Commonwealth. Senator Reynolds is since believed to have been removed from the claim.
The documents set out Ms Higgins' intention to sue for sexual harassment, sex discrimination, disability discrimination, negligence, and victimisation.
At the time, the claim was expected to be worth about $3 million, including $2.5 million for future economic loss, past economic loss approaching $100,000 and general damages of $100,000.
None of those figures were mentioned on Tuesday.
"The parties welcome the fact of the settlement," Ms Blumer said.
Ms Higgins alleges she was raped in 2019 by Bruce Lehrmann inside Senator Reynolds' ministerial office, for whom they both worked as staffers.
Mr Lehrmann has consistently denied the allegation. His trial in the ACT Supreme Court was derailed by juror misconduct. Prosecutors decided not to pursue further action.
Following the 2019 federal election, Ms Higgins moved to the office of then-employment minister Michaelia Cash to work as a media advisor.
Mr Lehrmann is also considering an insurance claim and defamation action.
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