Students who paid as much as $35,000 for the seminars, but claimed they were lured by false promises that they would learn Donald Trump's investing "secrets" from his "hand-picked" instructors.
Last year, the politician accused Indiana-born District Court judge Gonzalo Curiel of bias based on his Mexican ancestry.
In his ruling today, Judge Curiel called the $25 million settlement "extraordinary" in that it represented an estimated 80 percent recovery for the students.
"The amount offered in settlement provides significant and immediate recovery," he wrote.
One Trump University student objected to the settlement, particular a provision blocking students from opting out of it, saying in court papers she would like to seek full recovery from Mr Trump, plus punitive damages and other relief.
An attorney for that student could not immediately be reached for comment.
During the campaign, Mr Trump vowed to continue fighting the fraud claims but agreed to the settlement soon after he was elected. He has admitted he did not personally select the instructors, but his lawyers have described the claim as sales "puffery."