Source: Sharecast
The £230m settlement scheme, which is backed by the Financial Conduct Authority, was approved last December by 94% of those who had money in the fund.
In a judgement published on Friday, Justice Jonathan Richard said: "Having considered the matter in detail I see no reason to gainsay the conclusion of the overwhelming majority of scheme creditors at the court meeting.
"I will sanction the scheme."
Transparency Task Force, which lobbies for reform of the financial sector, said it was disappointed by the decision, and was considering appealing.
Parties have until 23 February to challenge the ruling.
The judgement, which was published on Friday, could mark the end a five-year saga that started with the suspension of the Woodford Equity Income Fund (WEIF) in June 2019.
A former star picker, Neil Woodford restricted withdrawals from the £2.9bn fund after values started to plunge, leaving investors unable to access their money. It was finally closed in October 2019, locking investor funds in.
The fund was widely criticised for holding illiquid assets that made it harder to meet redemption calls following months of underperformance.
The settlement deal, which is less than the total losses of £298m, will see investors recover around 77p in the pound.