Alan Lennon said the substantial sum reflected the seriousness of the discrimination he endured.
"I am pleased that this case has finally been resolved," Dr Lennon said. "I took the case primarily to challenge what I believe to be serious flaws in the public appointments system and the level of compensation agreed marks the seriousness of what occurred."
Dr Lennon agreed to accept £150,000 after an employment tribunal ruled, in June, that he had been subjected to religious discrimination by the Department of Regional Development (DRD).
The tribunal found that former Sinn Fein minister Conor Murphy breached a code of practice when he appointed Sean Hogan to the position as chairman of NI Water in March last year.
Mr Hogan was the only Catholic applicant for the job. Four others, all Protestants, were turned down.
Mr Murphy has consistently denied any allegations of discrimination.
Dr Lennon added: "I note that commitments have been made by the department to review these processes and it is vital for public confidence in government in Northern Ireland that this case acts as a springboard for change. I hope that this will result in a more transparent and equitable public appointments process."
The Equality Commission provided help to Dr Lennon in bringing his case against the DRD.
Evelyn Collins, chief executive of the Equality Commission, said: "The commission supported this case to establish that public appointments, including those which involve the exercise of a minister's discretion, are fully within the protection of anti-discrimination legislation. If unlawful discrimination occurs it is important that there is a sufficient degree of transparency and accountability in the appointments process to enable it to be challenged, and an effective remedy for the person discriminated against is an essential part of that."
In July the current Ulster Unionist Roads Minister Danny Kennedy said his department would not appeal against the tribunal's decision because of cost implications for the public purse.