The sex abuse victim, who has not been identified, filed the lawsuit against the Archdiocese of Chicago and Cardinal Francis George in 2010. He alleged the archdiocese failed to remove McCormack from access to children although they knew they had knowledge of past abuse.
McCormack was arrested in 2006 on multiple counts of criminal sexual abuse to which he pleaded guilty in 2007.
The victim in this case was sexually abused between eighth and 11th grades.
The settlement comes just a week after Chicago Archdiocese priest sex abuse documents were released.