Spire Healthcare, which runs private hospitals across the UK, will contribute £27.2m to a fund intended to halt legal proceedings by patients against the group.
Around £10m will be provided by co-defendants in the case, including Paterson’s insurers.
Paterson was jailed for 20 years at Nottingham Crown Court after he was found guilty in April of 17 counts of wounding with intent.
More than 500 of his private patients had been due to take their case to the High Court next month.
In a statement, Spire said the order “will conclude all current and known claims from patients against Spire Healthcare and its co-defendants, Ian Paterson and Heart of England NHS Foundation Trust”.
“The order will also provide for a portion of the fund to be set aside to provide compensation for any former patient of Mr Paterson who has not yet brought a legitimate claim against Spire Healthcare and the other defendants but does so prior to 30 October 2018,” it added.
Simon Gordon, interim chief executive at Spire, said: “Whilst nothing diminishes Mr Paterson’s responsibility for his actions, these events took place in our hospitals, and this should not have happened.
“We accept that better clinical governance in the private hospitals where Mr Paterson practised, as well as in his NHS trust, might have led to action being taken sooner, and it is right that we have made a material contribution to the settlement announced today.
“We have apologised unreservedly to Mr Paterson’s patients for their suffering and distress and we would like to repeat that apology.”
The trial heard Paterson exaggerated or invented cancer risks and claimed payments for more expensive procedures.
He also carried out hundreds of unnecessary operations on NHS patients.
The NHS has so far paid more than £17m in compensation to victims.
Emma Doughty, a specialist medical negligence lawyer for Slater and Gordon which represents more than 100 of the victims, said they have faced a long wait without knowing if they would receive compensation.
She added: “We are pleased that Spire has finally agreed to settle these cases and importantly, we hope this settlement will send a message to other private healthcare providers that patient safety must be their priority.”