MSNBC added that an internal review of the incident found that Matthew's comments were indeed inappropriate but were not meant to be taken as propositions.
The woman reportedly complained to company executives after Matthews made a series of "inappropriate comments and jokes about her while in the company of others".
While the Daily Caller reports that the incident ended with a payment of $40,000, NBC contests that, saying that the unnamed assistant producer - who's reported to have gone on to a number of "high-profile" media work in the years since - received "significantly less" in a "severance package".
MSNBC declined to comment on whether the employee left because of Matthews or whether this was the only claim in Matthews' history at the company. Matthews' show was on CNBC before it began airing on MSNBC.
The allegations were first reported by the Daily Caller.
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NBC News confirmed Sunday that Matthews was issued a reprimand in 1999 after the woman complained to CNBC executives.
Matthews has been the host of "Hardball" since 1997 and also hosted "The Chris Matthews Show" from 2002 to 2013.
The news of the reported settlement comes amid a wave of accusations of sexual misconduct in the entertainment and media industries and others, in what has become a national reckoning of abusive behavior against women by men in positions of power.
In November the network fired its biggest star, "Today" host Matt Lauer, after he was found to have engaged in "inappropriate sexual behavior" with a female colleague over a period of time beginning at the Sochi Olympics in 2014.
NBC also cut ties with "Game Change" author Mark Halperin in October after more than a dozen women accused him of sexual misconduct while he was political director at ABC News from 1994 to 2004. Lauer has said he is "truly sorry" but said some of what was being said about him was untrue or mischaracterized. As a result of the comments, the employee brought a formal complaint to NBC executives at the time.