The decision by district judge Gonzalo Curiel in San Diego ends almost seven years of legal battles with customers who claimed they were misled by failed promises to teach success in real estate.
The Democratic New York attorney general said the ruling "will provide relief - and hopefully much-needed closure - to the victims of Donald Trump's fraudulent university".
Trump had vowed never to settle but said after the election that he didn't have time for a trial, even though he believed he would have prevailed.
U.S. District Judge Gonzalo Curiel of the Southern District of California approved the settlement on Friday, one day after holding a final approval hearing in San Diego.
The lawsuits alleged Trump University offered seminars that were more like infomercials, pressuring customers to spend more and, in the end, failing to deliver.
This Sunday night, "The Simpsons" will air a suspiciously-timed new episode parodying Trump University, the now-defunct for-profit real estate college owned and operated by the Trump Organization until it went out of business in 2010.
National Hockey League to hold hearing on Sabres' Ristolainen's hit on Guentzel
Nick Bonino scored with 5:29 remaining to lead the Pittsburgh Penguins to a 3-1 win over the Buffalo Sabres on Tuesday night. Crosby also continued his dominance over Buffalo , upping his total to 16 goals, 35 assists for 51 points in 34 career games.
Almost 4,000 former students, who had submitted the claims and those who are eligible after this verdict, could get back about 90 percent of their money.
When attorneys reached the deal shortly after Trump was elected, Curiel said he hoped it would be part of "a healing process that this country very sorely needs".
During the campaign trail, Trump had criticized Curiel for his rulings in the cases and said the Mexican heritage of the Indiana-born judge made him biased.
Trump University dogged the Republican businessman throughout the campaign as rivals used his depositions and extensive documents filed in the lawsuits to portray him as dishonest and deceitful. Trump will also pay up to $1 million in penalties to the State of NY for violating state education laws, although under the terms of the deal he admits no wrongdoing. After his stunning presidential win in November, Trump chose to settle the lawsuits, saying he did not have the time for a trial.
Curiel also overruled an objection brought by Florida attorney Sherri Simpson, which threatened the settlement's approval. Another customer, Harold Doe, objected to the settlement because he wants more money, according to court filings by attorneys for Trump and the plaintiffs.
The civil settlement was not enough for Ms. Simpson, who wanted to see Mr. Trump tried on criminal racketeering charges.