Fox News and former host Lou Dobbs have settled a defamation lawsuit brought by Venezuelan businessman Majed Khalil, who alleged he was falsely accused of having helped rig the 2020 U.S. presidential election against Donald Trump.

In a letter filed in a New York federal court on Saturday, the parties said they had reached a confidential agreement to resolve the case. “This matter has been resolved amicably by both sides,” a Fox News representative said. “We have no further comment.” Mr. Dobbs and a lawyer for Mr. Khalil declined to comment. 

Lou Dobbs’s Fox Business show was canceled after he was named as a defendant in a lawsuit filed by Smartmatic.

Photo: Steven Ferdman/Getty Images

The settlement comes before another defamation case against Fox News and parent Fox Corp. is scheduled for trial April 17. In that case, voting-machine company Dominion Voting Systems is alleging that Fox News and Fox Business aired segments in which associates of former President Trump falsely claimed that Dominion was involved in a scheme to steal the election. Dominion, which is seeking $1.6 billion in damages, argues that Fox had a financial incentive to air the claims, in a bid to retain viewers, an allegation that Fox denies. Fox has said it is a question of press freedom to report on a major news event.

Mr. Khalil had alleged that Mr. Dobbs and Trump associate Sidney Powell helped fuel a conspiracy theory on air and on Twitter that accused him of helping to aid Dominion and Smartmatic USA Corp., another voting-machine company, miscount votes in the election—in one instance describing the situation as an “electoral 9-11 against the United States.” Fox has denied the allegations.

Mr. Dobbs’s Fox Business show, “Lou Dobbs Tonight,” was canceled by Fox Corp. in early 2021, a day after Mr. Dobbs was named as a defendant in a $2.7 billion defamation lawsuit filed by Smartmatic. A judge recently allowed the case to move forward. Fox denied the allegations.

Fox Corp. and The Wall Street Journal’s parent, News Corp, share common ownership.

Write to Isabella Simonetti at isabella.simonetti@wsj.com