Wisconsin Attorney General J.B. Van Hollen announced the settlement Tuesday. Grassland Dairy is one of the world's largest butter producers.
The state says the Greenwood company discharged water pollutants in excess of its permit more than 100 times between 2006 and 2013. It says the company only reported three of those incidents.
A Grassland Dairy attorney declined to comment to News-Herald Media on the settlement.
The company releases waste into the Black River. It's listed by regulators as an impaired water body because of low oxygen levels.
The state says the company's $70 million expansion in 2010 didn't address the pollution problems.