Two Melbourne partygoers whose lives were turned upside down as police entered a nightclub shooting in July 2017 have received a multimillion-dollar payout from Victoria Police, courtesy of the taxpayer.

Zita Sukys and Dale Ewins were performing a sex act inside Melbourne's Inflation nightclub on July 8 during the Sinners and Saints swingers party.

Ewins is believed to have pulled a toy gun from under a cushion on the couch he was sharing with Sukys when police mistook it for a genuine firearm.

Ewins was shot twice in the back, tasered three times, beaten and stomped on, while Sukys was shot in the leg. She said later that police "blew my leg apart".

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In a statement filed in the Victorian Supreme Court, police said Ewins "swung the weapon around and brought the muzzle to bear at (the officer)".

Two officers fired three shots at the couple before it was later established the gun was a fake, news.com.au reported.

Ewins points the toy gun inside Sukys' mouth. Photo / Seven News
Ewins points the toy gun inside Sukys' mouth. Photo / Seven News

Ewins and Sukys, who are no longer a couple, and nightclub owner Martha Tsamis were suing Victoria Police. The trial began on Monday in the Victorian Supreme Court but all three agreed to confidential settlements.

Sukys last year made public statements about the lengthy delays by Victoria Police. She said she was "mentally paralysed" and that Ewins had endured 11 rounds of surgery.

Police told news.com.au at the time that the investigation was complex and time-consuming.

"The police shooting at a King Street nightclub on 8 July, 2017 is being investigated by detectives from the Armed Crime Squad," the spokesman said.

"As with all complex incidents of this nature, it is important that a thorough and methodical investigation takes place, and this investigation can take time.

"Given the matter is subject to oversight by both Professional Standards Command and IBAC, and with the civil matter before the court, it would not be appropriate to comment further at this time."

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Swingers performing a sex act in a nightclub had their lives upturned when police came in shooting. Their nightmare ended yesterday. Photo / CCTV
Swingers performing a sex act in a nightclub had their lives upturned when police came in shooting. Their nightmare ended yesterday. Photo / CCTV

In photographs from the night, Sukys and Ewins are pictured in full costume. In one photograph, Ewins has the toy gun pointed inside her mouth.

Tsamis told AAP she was thrilled with the settlement.

"Sometimes cool heads come together and decide what the success of something can be, and I think maybe cool heads prevailed," she said.

"As far as I'm concerned we've done nothing wrong and we were prepared to fight it all the way." Tsamis also recently won a defamation case against Victoria Police over an unrelated incident.

"I'm hoping it's all going to settle down but I just think if you're going to talk to Victoria Police you talk to them in the Supreme Court," she said.

"I'm very happy with the outcome and I just want to get on with my life and run my business."

The trial began on Monday but the proceedings were dismissed by both parties on Wednesday after a mediation session on Tuesday.

Victoria Police has not commented on the case, or whether the officers involved were reprimanded.

Ewins was due to give evidence on Tuesday, but the settlement means his version of events will stay secret.