The suit, filed in U.S. District Court for the Middle District of Pennsylvania, argued that the state Department of Corrections violated the First Amendment by preventing witnesses, including reporters and family members of victims, from observing and hearing the entire process.
In 1998, during the last execution, as in prior years, prison officials at SCI Rockview, the state's execution site, drew a curtain over the window between the execution chamber and the witness room, blocking witnesses from viewing most of the process.
This prevented witnesses from seeing the times when lethal-injection executions went awry, said the ACLU, which represented the plaintiffs, in a statement.
In the compromise, the Corrections Department agreed to open the curtain between the witness room and the death chamber during the duration of the execution and set up a public address system so the witnesses will hear the activity and any statements the inmate might make.
The suit, filed in September 2012, contended that by shuttering witnesses from parts of the procedure, the state was preventing them from observing the most drastic action the government takes against a citizen.
The agreement stipulates that the corrections secretary has the right to close the curtain for security reasons or shut down the public address system should an inmate say anything "malicious or threatening" toward witnesses.
Those conditions satisfied Corrections Secretary John Wetzel, who was named as a defendant.
"We worked diligently to come to a mutual agreement, and we are pleased with the outcome," said Sue Benzinger, a spokeswoman for Wetzel.
The newspapers sued shortly before the scheduled execution of convicted murderer Terrance Williams in the fall of 2012. Williams was sentenced to die for the 1984 bludgeoning death of Amos Norwood in Philadelphia but received a stay in a separate pleading.
No executions are scheduled, according to a Corrections Department spokeswoman. There are 191 inmates on death row in Pennsylvania.