Ms Blauel, a German recording engineer, sued Sir Elton for allegedly breaching an agreement the pair signed after their divorce in 1988 following a four-year marriage.
She initially asked for an injunction to prevent future public disclosures as well as damages and costs said to be around £3 million.
A spokesman for Sir Elton said: “The parties are happy to announce that they have resolved this case, in a way that acknowledges Renate’s need for privacy.
“For her part, Renate acknowledges that Elton has acted in a dignified and respectful way towards her in the last 30 years and has been always happy to help her.
“They will not be discussing each other, or their marriage, in future and will be making no further comment about the case.”
At the time of their split in 1988, the pair signed a contract which included a clause preventing either of them from discussing their marriage or the reasons for their separation.
Earlier this year, Ms Blauel sued Sir Elton over “repeated and flagrant” breaches of the agreement in his 2019 memoir Me and in the biopic Rocketman, also released in 2019.
In papers filed in his defence, the singer’s legal team denied breaching the agreement, arguing the details in the book and film are public knowledge and that the contract “applies only to private and confidential matters”.
Five scenes from Rocketman were referenced in Ms Blauel’s claim including scenes showing their wedding day as well as sleeping in separate bedrooms.
Another scene depicts Sir Elton in a group therapy session discussing the failure of his marriage “on account of his unhappiness and in particular his sexuality,” the claim read.
