Heard, 36, wrote on Instagram that she had made the "difficult" choice to settle, adding the decision was "not an act of concession".
She and Depp, 59, faced off in court earlier this year, where jurors heard intimate details of their relationship.
A jury then found Heard had defamed Depp in an article in which she said she was a victim of abuse.
The terms of the settlement were not immediately clear.
The BBC has reached out to Depp's legal team for comment.
Earlier this month, Heard filed an appeal in the case, asking for the jury's verdict to be reversed or for a new trial entirely.
But in her statement on Monday, the actress said she had made the choice to settle "having lost faith in the American legal system".
"Even if my US appeal is successful, the best outcome would be a retrial," she said.
"I simply cannot go through that."
The six-week televised trial drew widespread public scrutiny.
The former couple, who divorced in 2017, presented starkly different accounts of their relationship and both accused the other of misbehaviour and abuse.
The jury sided mostly with Depp - who denied abusing Heard - and awarded him USD$15m in damages.
The verdict surprised some legal experts, especially as it followed Depp's loss in a similar case in the United Kingdom two years ago.