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The legal action was initially brought by Lane's Gifts and Collectibles in February of 2005, but was later changed to a class-action, or group, case.
Advertisers had complained that Google was falsely charging the firms for channelling clients to their websites.
Google charges advertisers a fee each time a user clicks on an ad that is displayed on the search firm's website.
Should a company be targeted by an automated programme or a malicious individual, the number of clicks, and subsequent fees, can surge to huge levels.
'Fair, reasonable'
Google was accused of not doing enough to protect advertisers from this sort of "click fraud" abuse.
It has since taken steps to improve security and introduced a new feature that will give advertisers a more detailed picture of their Google ad accounts and any "invalid clicks", as Google terms possible click fraud, which have been detected.
The company is not the only search engine to face this sort of problem. Earlier this year, Yahoo settled a similar case brought in California.
Google's Arkansas legal tussle was eventually made up of more than 70 objections. It was granted class-action status because many of the smaller companies said they lacked the funds to pursue the problem alone.
Under the terms of the settlement, Google will give advertising credits worth $4.50 for every $1,000 spent on advertising at its website.
Miller County Circuit Judge Joe Griffin called the settlement "fair, reasonable and adequate".
According to the Press Association, the only people who will get money from the settlement are the lawyers, who are due to split $30m in fees.
