The third-generation slate was originally marketed as 'iPad WiFi + 4G' but is not compatible with local 4G networks in the territory.
Apple offered refunds to Australian customers who felt that they had been deceived by the branding, but argued that it never stated the device is compatible with the country's 4G, AFP reports.
However, this did not appease the Australian Competition and Consumer Commission, who took legal action against the Cuppertino-based firm. The tablet has since been rebranded as 'iPad WiFi + Cellular' in the territory.
Apple was also forced to rename the product in the UK, where it is also incompatible with 4G, following scrutiny from the Advertising Standards Authority.
The settlement figure must now be approved by a judge before the matter is resolved.