The six children filed suit against the Department of Social and Health Services for putting them in the home of Jose and Juanita Miranda, who the children say raped and tortured them for years.
Jose later pleaded guilty to child rape, molestation and physical abuse of the children -- both boys and girls -- who came to live with them at their Tacoma home from 1997 to 2003.
An attorney representing the foster children described Jose as "a foster parent forcing kids to engage in just graphic sexual acts with him, and forcing the kids to engage with each other in graphic sexual acts."
The lawsuit was scheduled for trial in February, but the state announced Tuesday that it was settling the case to "avoid the expense of a costly and complex trial and further stress for the plaintiffs."
"We regret that these children suffered at the hands of adults they had trusted to love and keep them safe," said DSHS Children's Administration Assistant Secretary Denise Revels Robinson.
Both foster parents are now dead. Jose died in prison several years ago of heart failure and Juanita died of a drug overdose in 2006.