Announcing that South Yorkshire Police has agreed to pay the Christian entertainer "substantial damages", they also said he wants a claim against the BBC brought to trial as soon as possible
Sir Cliff, 76, sued both the force and the broadcasting corporation after reports named his as suspected sex offender. A police raid on his apartment in Sunningdale, Berkshire, in August 2014 was broadcast live.
In response, the BBC said South Yorkshire Police's decision to settle does not change the "fundamental principle" that the corporation has a responsibility to report news stories which are in the public interest.
A spokeswoman said: "We've said throughout that the BBC's responsibility is to report news stories that are in the public interest."
"Against the extensive disclosure of historic child sexual abuse by figures of high public prominence, we consider that the report into the investigation into Sir Cliff for such an offence, and the decision by police to search his premises was such a news story and that the BBC had a duty to report it.
"The police decision to settle the claim against them by Sir Cliff because of how they handled the investigation doesn't change the fundamental principle that journalistic organisations should be able to report on the police and police investigations into individuals.
"A search happened, and because it did, the BBC reported it - just as any other media organisation would have and did."
Sir Cliff claimed private information was misused, his human right to respect for private life was infringed and data protection legislation was breached during the coverage.
A judge was told that in 2013 a man made an allegation to the Metropolitan Police that he had been sexually assaulted as a child by Sir Cliff at Sheffield United's Bramall Lane stadium in 1985.
Metropolitan Police officers passed the allegation to South Yorkshire Police in July 2014.
Sir Cliff always insistent on his innocence and, in June last year, prosecutors announced that the entertainer would face no charges.
Justin Rushbrooke QC said South Yorkshire Police was wrong to disclose information about the investigation into Sir Cliff to the BBC and the force should not have co-operated with the corporation in the way it did.
He confirmed the claim against the BBC had not been resolved.