A six-year-old sexual harassment lawsuit against the city’s former health chief Felix G. Arroyo was dismissed after the City of Boston reached a last-minute settlement with the woman who filed the complaint, to avoid a trial.

Hilani Morales dropped her claims against her former supervisor Arroyo and the city, for harassment and retaliation by being demoted after complaining to HR, respectively, on Tuesday morning when the trial had been set to begin in Suffolk Superior Court.

Arroyo, who was fired by then-Mayor Marty Walsh after an internal investigation, opted not to drop his defamation counterclaim against Morales, meaning that a trial in that separate, but connected, matter will be held, but not until next year. A court date was set for June 10, 2025.

Superior Court Judge Adam Sisitsky begrudgingly agreed to a request from Morales’ and Arroyo’s attorneys to delay the defamation trial, after chiding both sides for essentially wasting the court’s time. Jury selection took a week and the case has been making its way through the court since March 2018.

“I think she’s at peace,” Morales’ attorney, John Tocci, a partner with Tocci & Lee, LCC, said of his client after Tuesday’s court proceeding. “The hard part is over.”

Details of the settlement were not shared by the city, which per a spokesperson, was “in the process of finalizing a mutually agreeable settlement” with Morales, nor by Tocci who said that he was “not at liberty” to disclose the monetary amount.

Tocci did say that the agreed-upon amount, which will be borne by city taxpayers, was higher than the $95,000 in damages his client had been seeking in her lawsuit, a figure he described as a “placeholder.”

Arroyo, who denied the harassment accusations and has stated that Morales was a bad employee who filed suit only when she felt her job was in jeopardy, plans to continue to pursue his claim of defamation, his attorney, Anthony Ellison, said.

“Felix G. Arroyo is, and was, prepared to clear his name at trial,” Ellison said in a statement. “While the claims against Mr. Arroyo have been dropped, he will continue to pursue his claim of defamation and have his day in court. Justice for Mr. Arroyo has been delayed, but it will not be denied.”

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The defamation claim stems from text messages with harassment and assault claims Morales made to a coworker. Arroyo, a former city councilor who ran for mayor in 2013, is seeking unspecified damages “attributable to emotional distress and good reputation.”

Arroyo filed a wrongful termination suit against the city, which didn’t conclude in its internal investigation that led to his firing that he assaulted or had sex with his employee, Morales, although it did find that “Morales’ allegations could expose the city to liability,” an outside attorney wrote for the city at the time.

Tocci described the defamation counterclaim as baseless, given that the coworker who received the messages didn’t publish them nor did the messages result in Arroyo’s firing. He said his client’s settlement with the city also resulted in dismissal of charges against Arroyo, to absolve the city of legal liability.

He wouldn’t speak to why his client chose not to pursue the charges, but did say that “all the conditions are right for a settlement.”

“It was very heartening to sit and listen to so many prospective jurors who testified honestly that they understand that when a woman comes forward with allegations like this, that they should be believed,” Tocci said. “I think that was a positive experience to go through for Hilani.”

A more “narrow” defamation trial, Tocci said, means that heavy hitters in the city’s political and legal circles initially expected to take the stand in the harassment case, such as Mayor Walsh, may no longer have to testify.

Arguing Arroyo’s case in court was Ricardo Arroyo, a former city councilor who was defeated in last fall’s election cycle after a string of scandals that included being slapped with a $3,000 ethics fine for continuing to represent his brother legally in this case after joining the City Council.

Also on hand was their father, Felix D. Arroyo, who is known for being a former city councilor, School Committee member, and Suffolk registrar of probate.