U.S. District Judge Myron Thompson issued an opinion Monday saying the agreement isn't perfect but can take effect.
Female inmates already are living with other prisoners at the state's lone women's prison, and male inmates will be integrated into the general prison population next year.
Thompson sided with prisoners in December and ordered the Department of Corrections to quit making HIV-positive inmates live in housing areas away from other prisoners.
Thompson held two hearings last week on the resulting settlement.
The American Civil Liberties Union represents inmates who sued to end the practice.