Cunningham was reportedly carrying two 18 packs of beer when he was run over by a bus.
The Orange County Transportation Authority's insurance will cover more than half of the settlement, and the remaining amount will come from a reserve fund.
A transit spokesman says the agency wanted to go to trial, arguing Cunningham fell under the bus because his blood-alcohol level was more than three times the legal limit, but attorneys for the insurance company wanted to settle.
The Associated Press contributed to this story.
