Archbishop Bernard Hebda addressed the controversy in a letter.
"Religious leadership today must do everything in our power to prevent a 'boiling point' with Covid 19," the statement reads
In a letter to partner churches, Catholic leaders said Mass can resume at one-third capacity.
The priest made controversial remarks during a service in Lonsdale, Minnesota.
The settlements will allow the diocese to avoid bankruptcy, according to a statement.
John Nienstedt resigned in disgrace from the archdiocese in 2015