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(Reuters) - Rolling Stone magazine has agreed to pay $1.65 million to a University of Virginia fraternity to settle a defamation lawsuit over the publication's debunked article about an alleged gang rape on campus, the fraternity said on Tuesday.
The Virginia Alpha Chapter of Phi Kappa Psi fraternity, which was implicated in the 2014 story, which was retracted, said it would donate a significant portion of the settlement proceeds to groups providing services to combat sexual assault on college campuses.
No other terms of the agreement were provided in the fraternity's online announcement of the deal but a spokesman for Phi Kappa Psi, Brian Ellis, confirmed the sum to be paid in return for dismissal of the suit was $1.65 million.
The original lawsuit sought $25 million in damages.
Rolling Stone representatives declined comment except to say the settlement had just been reached and has not yet been entered in court.
The fraternity's defamation claims against the magazine and the article's author, Sabrina Rubin Erdely, had been due to go to trial in October.
The settlement brings to an end the last of several lawsuits sparked by the "A Rape on Campus" article, which described the alleged sexual assault on a freshman woman during a fraternity party at the University of Virginia's Charlottesville campus in 2012.
The article stoked a national debate about sexual assault on U.S. college campuses, where by some estimates one in five female students will become a victim before graduating, and fueled perceptions of fraternity culture as dangerously permissive and predatory.
But the published story, based on the account of a female student identified only as "Jackie," was ultimately discredited as the magazine admitted it never sought comment from the seven men accused of the alleged rape.
The story was officially retracted in April 2015, and an outside review concluded that Rolling Stone failed to follow basic journalistic safeguards in its reporting.
A separate defamation case brought against the magazine by university administrator Nicole Eramo was settled two months ago after a federal court jury awarded her $3 million in damages. Another lawsuit by three former fraternity members was dismissed by a federal judge in June 2016.
Writing by Steve Gorman; Editing by Bill Trott