Ian O'Donnell, now 18, suffered severe skull fractures in the incident outside his Letterkenny home just weeks before his third birthday.
Mr O'Donnell from Glenwood Park in Letterkenny, through his mother Helen O'Donnell, sued milkman Paul Rodgers, Manorcunningham, Letterkenny and van owners, John, Paul and Brendan Kelly of Killtown, Killgordan.
The claims were denied - the court heard liability was in full issue in the case.
John Finlay SC for Ian said he finished school but it was not likely he would be able to hold down employment in the future.
Mr Justice Kevin Cross, approving the settlement, said he hoped it would reassure Ms O'Donnell that Ian's needs will be met for the rest of his life.
In a statement to Highland Radio News Ian's Mother Helen O'Donnell said:
'The 15th of March marked the end of a long hard legal battle to obtain justice for our son. We remain at a loss to understand how this case was defended for over 15 years. However justice has now been served and a fund shall be put in place to look after our son’s needs going forward into the future.
We are very relieved to bring closure to the case and would like to thank all our family members, friends, the doctors, experts and our legal representative, Seamus Gunn of McCloughan Gunn & Co. Solicitors, and all his team for their help and exceptional professional support over the years, for without them we would not be where we are today.
We are now looking forward to getting on with our lives.'