Four days earlier, a judge banned the sonar over concerns it could harm marine mammals.
The settlement prevents the Navy from using the sonar within 25 miles of the newly established Northwestern Hawaiian Islands Marine National Monument during its Rim of the Pacific 2006 exercises, and also imposes a variety of methods to watch for and report the presence of marine mammals.
"Military readiness does not require, and our laws do not allow, our natural resources to be sacrificed in the name of national defense," said Joel Reynolds, a Natural Resources Defense Council attorney.
The Navy said it could begin using the sonar as soon as this weekend. The sonar portion of the exercises, which began June 26, is intended to train sailors to detect and hunt stealthy submarines.
"We want to ensure that the U.S. Navy and its partner navies get the benefit of this opportunity to train in anti-submarine warfare," said Rear Adm. James Symonds, director of environmental readiness.
Environmentalists claim whales have stranded themselves on beaches after being exposed to high-intensity mid-frequency sonar. In some cases, whales bled around the brain and in the ears. The sonar is also claimed to interfere with the ability of marine mammals to navigate, hunt, take care of their offspring and avoid predators.
The Navy had previously received a six-month exemption from federal laws protecting marine species in its use of the sonar. Environmental groups, led by the Natural Resources Defense Council, later obtained a court order temporarily barring the use of the "mid-frequency active sonar."
U.S. District Court Judge Florence-Marie Cooper said the plaintiffs had shown a possibility that the Navy exercises "will kill, injure, and disturb many marine species, including marine mammals, in waters surrounding the Hawaiian Islands."
The settlement agreement requires the Navy to use electronic airborne monitoring for marine mammals, and requires a marine mammal lookout on all surface ships operating the sonar.