The lawsuit was filed in Philadelphia. A trial had been set to start next week.
The headmistress claimed Winfrey's remarks caused her problems when attempting to find work after her employment at the school.
Winfrey's production company Harpo Productions released a statement Tuesday:
"The two parties met woman to woman without their lawyers and are happy that they could resolve this dispute peacefully to their mutual satisfaction. Ms. Winfrey testified in her deposition that she did not intend the implications placed on her words by the plaintiff. Ms. Mzamane testified in her deposition that she has no evidence that Ms. Winfrey knowingly made a false statement about her or entertained serious doubt about the truth of what she said. We are pleased both parties have reached a conclusion."
The Associated Press contributed to this report.
