Businessman Adam Catzavelos must pay R150,000 in damages for using a racial slur directed at black South Africans, according to a deal he has struck with the SA Human Rights Commission (SAHRC).

The money, to be paid monthly, will be given to a charitable organisation focusing on social cohesion.

Catzavelos' lawyers signalled previously that they were negotiating an out-of-court settlement with the SAHRC, which had brought a complaint of hate speech against him in the Equality Court.

Earlier on Thursday, the SAHRC shared a written apology from Catzavelos.

The court is expected to be asked to ratify the settlement later on Thursday.