The former Baretta star was accused of killing his partner in 2001 after she was fatally shot in his parked car outside a Los Angeles restaurant, but he was acquitted of charges including murder and conspiracy in 2005.
Bakley's eldest children filed a civil lawsuit against the actor for wrongful death, ordering Blake to pay them $30 million (£18.8 million) in damages, but the sum was cut in half by an appeals court in 2008.
Now the 79 year old has settled the case after reaching an agreement with his former lover's offspring.
The Tv star, who filed for bankruptcy in 2008, confirmed the news to the National Enquirer, but declined to go into specifics.
The U.S. tabloid estimates the figure is around $2 million (£1.3 million).