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The Sigma Nu fraternity agreed to join in the settlement, the Jackson Clarion-Ledger reported.
Sammy Broadhead, 25, died in 2004 during a visit to the fraternity. He had been playing beer pong, a game that involved heavy drinking.
Dana Covert of Meridian sued the university and the fraternity for wrongful death. Briggs Smith, Covert's lawyer, said the university, as part of the settlement, agreed to establish a scholarship fund in Broadhead's memory.
Students who transfer from Meridian Community College to Southern Mississippi, as Broadhead did, will be eligible for assistance.
Other financial details of the settlement were not made public.
Smith said Sigma Nu agreed to remove content that encourages drinking from its Web site.
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