The World Organization for Human Rights said Yang had met with families of the jailed dissidents right after the hearing and agreed to the essential elements of the settlement. The settlement agreement is dated Nov. 9 but was filed on Nov. 13.
"We are committed to making sure our actions match our values around the world," Yang said in a statement. "After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo and for the future."
Earlier this year, Wang's wife, Yu Ling, had charged that a Yahoo Chinese affiliate had turned over details to prosecutors that helped identify him to Chinese authorities.
"Plaintiffs were subjected to torture and cruel, inhuman or degrading treatment, including arbitrary, prolonged and indefinite detention, for expressing their free speech rights and for using the Internet to communicate about democracy and human rights matters," the original complaint said.
The suit named Yahoo, its Hong Kong subsidiary and Alibaba.com, China's largest e-commerce firm, as defendants. Yahoo holds a large minority stake in Alibaba.com.
Wang was sentenced to 10 years in prison for "incitement to subvert state power" after he e-mailed electronic journals advocating democratic reform and a multiparty system, as was business journalist Shi Tao, winner of the 2007 International Journalist's Golden Pen award.
"They are serving 10-year prison sentences as a direct result of the information Yahoo! provided to Chinese authorities," the World Organization for Human Rights said in a statement following the settlement.
The human rights advocacy group said that while the identities of only four individuals arrested as a result of Yahoo's alleged actions have been made public, "it is suspected that hundreds more have been similarly affected."
Yahoo and other Internet companies maintain that as multinational companies, they must comply with the local laws of the countries in which they operate and said the U.S. government should do more to lobby for political prisoners.