Investors responded positively to the news, pushing Facebook shares up 1.8%.
Facebook has been expecting this
Analysis by Dave Lee, BBC North America technology reporter in San Francisco
Facebook had been expecting this. It told investors back in April that it had put aside most of the money, which means the firm won't feel much added financial strain from this penalty.
What we don't yet know is what additional measures may be placed on the company, such as increased privacy oversight, or if there will be any personal repercussions for the company's chief executive, Mark Zuckerberg.
The settlement, which amounts to around one quarter of the company's yearly profit, will reignite criticism from those who say this amounts to little more than a slap on the wrist.
What was the Cambridge Analytica scandal?
Cambridge Analytica was a British political consulting firm that had access to the data of millions of users, some of which was allegedly used to psychologically profile US voters and target them with material to help Donald Trump's 2016 presidential campaign.
The data was acquired via a quiz, which invited users to find out their personality type.
As was common with apps and games at that time, it was designed to harvest not only the user data of the person taking part in the quiz, but also the data of their friends.
Facebook has said it believes the data of up to 87 million users was improperly shared with the now defunct consultancy.
The scandal sparked several investigations around the world.