The settlement was finalized Aug. 4 with Ed Knaggs who was fired over the 2011 drowning but won reinstatement, The Wenatchee World reported Wednesday.
Knaggs will be paid about $165,000 to remain on administrative leave through August 2016. Knaggs declined to comment when he was contacted Wednesday.
Legal expenses, back pay and the settlement for Knaggs totaled about $500,000, Superintendent Brian Flones said. The district also paid $2 million to settle a wrongful death lawsuit with the family of Antonio Reyes.
"It's been a long and difficult legal process," Flones said. "As we look at it and all the circumstances and the healing process for Ed, the school, the family and the community, we felt this would be in the best interests for all of us to move on."
The settlement was approved by the Wenatchee School Board and the teachers' union, the Wenatchee Education Association.
Knaggs was teaching a physical education class in the Wenatchee High School swimming pool Nov. 17, 2011, when Reyes drowned. The freshman, who didn't know how to swim, was found at the bottom of the pool nearly an hour after the class had ended.
Knaggs was placed on administrative leave and fired in April 2012. He appealed. The firing was overturned by Chelan County Superior Court Judge Lesley Allan, who said the district was equally at fault. She ruled Knaggs should be reinstated with back pay.
The settlement pays Knaggs his base teaching salary of $82,500 a year. He will also receive standard health benefits and retirement contributions. He can't work for another school or government agency during the two-year period.
The school district began swim instruction last year for high school students who do not know how to swim.