The Centre Daily Times in State College, Pa., reported Friday the university had completed its obligations to the family estate with payment of a $3 million retirement bonus included in an August 2011 contract amendment.
The university said the Paterno estate received a total of $4.8 million cash and use of a Beaver Stadium suite for 25 years, while the university wrote off $350,000 the family owed the university, The (Allentown) Morning Call reported.
The total excludes $1,000 a month to Paterno's wife, Sue, for the rest of her life.
Money for the payments comes from the Penn State athletic department's reserve fund.
"The university and coach Paterno's estate have finalized the remaining payments due under coach Paterno's employment contract," Penn State spokesman Bill Mahon said.
Penn State's board of trustees, Mahon said, decided in November to honor the terms of Paterno's contract as if he had retired at the end of the 2011 season.
"That contract recognized coach Paterno's decades-long contributions to our football program and to the entire university," Mahon said.
In a statement Thursday, Paterno family attorney Wick Sollers said: "The university made payments today pursuant to coach Paterno's contract. In January, university officials acknowledged that they would fully honor the contract."
Paterno, who died of lung cancer in January, was fired Nov. 9 over his failure to act following allegations of sexual abuse by assistant football coach Jerry Sandusky, who has been charged with sex crimes involving 10 boys.