The funds were used by Tehran to purchase military equipment from the United States prior to the break in diplomatic relations.
"Iran will receive the balance of $400 million in the Trust Fund, as well as a roughly $1.3 billion compromise on the interest," the statement reads.
According to Kerry, US nationals and companies were awarded over $2.5 billion by Iran through the similar legal process.
The settlement follows Washington's lifting of sanctions targeting Iran over its nuclear program after global nuclear watchdog IAEA verified on Saturday Tehran's compliance with a nuclear agreement reached last July.