MCI won approval for its settlement with the US Securities and Exchange Commission (SEC) from the court overseeing its bankruptcy case.
The US Bankruptcy Court approved the settlement, under which victims of MCI's fraud are to receive $500m (£311m) in cash and $250m (£155m) in shares, MCI said.
The ruling resolves all claims by the SEC against MCI, still legally called WorldCom, for its past accounting practices, the company said. Shareholders, bondholders and other victims will get the settlement proceeds when MCI emerges from Chapter 11 bankruptcy protection.
The SEC's legal proceedings against MCI began in June last year. It filed fraud charges the day after the company said it would restate earnings for five consecutive quarters ending with first quarter of 2002, because of accounting irregularities.
MCI later admitted to further accounting irregularities totalling more than $9bn (£5.6bn).
Joris Evers writes for IDG News Service