New York state Attorney General Eric Schneiderman and retail property giant Simon Property Group Inc. reached a settlement in an antitrust case that requires Simon to end practices that the attorney general alleged protected Simon’s popular Woodbury Common Premium Outlets from competition.

Simon Property, the largest shopping mall owner in the U.S., agreed to pay the state $945,000 and revise existing leases to end restrictions that deterred retailers from opening additional outlet stores, according to a press release from...