The shareholders had been seeking $US8 billion ($A12 billion) in claims.
The parties did not disclose details of the settlement and defence lawyers did not address the judge, Kathaleen McCormick of the Delaware Court of Chancery. McCormick adjourned the trial just as it was to enter its second day and she congratulated the parties.
The plaintiffs' lawyer, Sam Closic, said the agreement just came together quickly.
Billionaire venture capitalist Marc Andreessen, a defendant in the trial and a Meta director, was scheduled to testify on Thursday.
Shareholders of Meta sued Zuckerberg, Andreessen and other former company officials including former Chief Operating Officer Sheryl Sandberg in hopes of holding them liable for billions of dollars in fines and legal costs the company paid in recent years.
The Federal Trade Commission fined Facebook $US5 billion ($A7.7 billion) in 2019 after finding that it failed to comply with a 2012 agreement with the regulator to protect users' data.
The shareholders wanted the 11 defendants to use their personal wealth to reimburse the company. The defendants denied the allegations, which they called "extreme claims."
Facebook changed its name to Meta in 2021. The company was not a defendant and declined to comment.
On its website, the company has said it has invested billions of dollars into protecting user privacy since 2019. A lawyer for the defendants declined to comment.
"This settlement may bring relief to the parties involved, but it's a missed opportunity for public accountability," said Jason Kint, the head of Digital Content Next, a trade group for content providers.
Zuckerberg was expected to take the stand on Monday and Sandberg on Wednesday. The trial was scheduled to run through the end of next week.
The case was also expected to include testimony from former Facebook board members Peter Thiel, Palantir Technologies co-founder, and Reed Hastings, co-founder of Netflix .
By settling, Zuckerberg and other defendants avoid having to answer probing questions under oath. Sandberg was found during the litigation to have deleted what were likely her most sensitive emails and she was sanctioned, making it harder for her to tell her side of the story in court.
The settlement allows plaintiffs to avoid trying a very difficult case. Meta investors alleged that former and current board members completely failed to oversee the company's compliance with the 2012 FTC agreement. The lawsuit also claimed that Zuckerberg and Sandberg knowingly ran Facebook as an illegal data harvesting operation.
