Terms were not released of the agreement Friday between the Reading-based utility and Steven Vega, the father of 4-month-old Matthew Vega.
Matthew and four others were killed in the February 2011 explosion that destroyed eight homes and triggered a raging fire.
Steven Vega's attorney Chris Perrucci said his client continues to mourn but hopes the settlement will bring some closure.
UGI spokesman Joe Swope confirmed a settlement was reached but declined to comment, citing pending related litigation.
Earlier this month, UGI agreed to pay $386,000 and speed up replacement of cast iron pipelines as part of a proposed settlement with state regulators.