The lawsuit, filed in 2008, alleged Dannon overstated the yogurt's health benefits. Dannon claims bacteria in the yogurt can strengthen the body's defenses or regulate digestion.
The settlement still needs the approval of the U.S. Court for the Northern District of Ohio.
Dannon said it decided to settle the lawsuit to avoid "the uncertainty and expense of further litigation and denies any wrongdoing."
Dannon also said it would make changes to the way it markets and labels the products.
Customers who bought the products since they were introduced in 2006 and 2007 will be able to file for reimbursement.
When the settlement is approved, consumers can file for reimbursement with Dannon.
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