A statement agreed by the singer and media mogul Rupert Murdoch's News International, publisher of the defunct newspaper, was read before the British court in London Monday, The Guardian reported.
The statement said Church's voice-mail messages were targeted for years and that the newspaper "unlawfully obtained" and published "private medical information" about the singer and her mother after her mother attempted suicide.
The Guardian said about half of the settlement will be used for attorney's fees and the remainder will be split between the singer and her parents, Maria and James Church.
In a separate development, an individual knowledgeable about the situation said telephone numbers for two executives promoting Church in the United States were found among the notes of Glenn Mulcaire, the private investigator who worked for the News of the World, the report said.
"They feel very violated and annoyed," the source told The Guardian.
The FBI declined to comment but sources said the discovery could expand an investigation by U.S. law enforcement officials into the activities of the News of the World in the United States, where Murdoch also has holdings, including The Wall Street Journal. The phone-hacking scandal has been largely confined to Britain so far.