Pending court approval, the amount includes A$85m ($88.5m) as well as interest and costs.
NAB company secretary Michaela Healey said in a statement, "The settlement of the class action is a purely commercial decision made in the interests of our shareholders."
According to the law firm leading the class action Maurice Blackburn, NAB purchased $1.2bn of collateralized debt obligations (CDOs) in 2006, which were highly exposed to the US subprime residential mortgage market.
In 2007 and early 2008, the CDOs became toxic debt, following which nearly 15,000 shareholders sued the bank as the share prices plunged in 2008.
