The agreement saved the running back about $315,000. The Chiefs issued a terse announcement saying they had made the settlement in conjunction with the NFL Management Council and the NFL Players Association. Originally, they suspended the former two-time Pro Bowler two weeks, which would have cost him about $630,000.
"Johnson will remain suspended through the club's game at Jacksonville on November 8th," the team said in the statement. "He will not be permitted to participate in any team activities or be on team premises until Monday, November 9th. This matter is now closed, and the Chiefs will have no further comment."
The Chiefs had said the suspension was for conduct detrimental to the team.
Johnson and his agent, Peter Schaffer, worked out an agreement with the team after the player twiced used a gay slur and questioned coach Todd Haley's qualifications on his Twitter account. Johnson will be docked just one game check instead of two. Players are paid weekly over 17 weeks.
ESPN's Chris Mortensen first reported the story Saturday night.
Johnson's agent, Peter Schaffer, said Monday that as far as he knew, Johnson would remain with the Chiefs. He needs just 75 yards rushing to become the team leader.
"I've been given no indication other than that," Schaffer said. "There have been no discussions about that."
Schaffer told The Associated Press that both sides benefited from the settlement and that Johnson had learned from the entire experience.
"Larry apologized," Schaffer said. "He learned from it and hopefully other people learned from it. My hope is that people learn that something positive can come out of this and that there are words that should not be used because they demean people."
Information from The Associated Press contributed to this report.