A US federal judge has given final approval to Facebook's $650 million payment to settle a privacy dispute between the social media giant and 1.6 million users in the state of Illinois.

"We are pleased to have reached a settlement so we can move past this matter, which is in the best interest of our community and our shareholders," a Facebook spokesperson said in a statement to AFP.

The decision was issued on Friday, according to documents seen by AFP on Sunday.

Chicago attorney Jay Edelson sued Facebook in 2015, alleging it illegally collected biometric data to identify faces in violation of a 2008 Illinois privacy law.

At the end of January 2020, Facebook agreed to pay $550 million after it failed to get the lawsuit -- filed as a class action in 2018 -- dismissed.

But in July 2020, the judge in the case, James Donato, ruled that the amount was insufficient.

During the trial, it emerged that Facebook was violating Illinois law by storing biometric data -- digital scans of people's faces, in support of its face-tagging feature -- without users' consent.

In 2019, Facebook proposed that the facial recognition feature be optional only.

According to Donato, the regulation is "a landmark result" and represents a "major win for consumers in the hotly contested area of digital privacy."

"It is one the largest settlements ever for a privacy violation," he commented, noting that plaintiffs will receive at least $345 each in compensation.