According to The Telegraph, Scott had complained about the lack of older female presenters on television earlier this year.
The 57-year-old accused the broadcaster of ageism after it offered her a high-profile role, but then gave the job to two younger broadcasters.
In a victory for older female stars, many of whom have complained that they are treated unfairly by the television industry, she has now received an apology from Channel Five and a financial settlement.
Scott first gained prominence as a newsreader on News At Ten in 1980, and went on to become the face of the BBC's Breakfast Time programme.
The case, which could have disclosed embarrassing and damaging details about Channel Five's recruitment processes, was due to begin on Monday.
In a statement to the paper, a Channel Five spokesman said: "The proceedings brought by Selina Scott against Five under new age discrimination laws have been settled. (ANI)