Quine, who has no possibility of parole after convictions in 1981 for first-degree murder, kidnapping and robbery for ransom, underwent the surgery at a San Francisco hospital on Thursday.
"For too long, institutions have ignored doctors and casually dismissed medically necessary and life-saving care for transgender people just because of who we are," said Kris Hayashi, executive director of the Transgender Law Center, which negotiated the 2015 settlement.
Under the settlement's terms, the state also agreed to allow inmates who are transgender or have gender dysphoria access gender-affirming items such as nightgowns, scarves, and necklaces.
Quine, who was born male but identifies as female, previously wrote that her presence in the men's prison creates "confusion and mixed emotions from the males that go from romantic thoughts to disgust and explosive turmoil reactions." She had reportedly attempted to commit suicide at least five times while in prison.
Hayashi referred to the surgery as a landmark victory for "all transgender people who have ever been denied the medical care we need."
Meanwhile, the daughter of Shahid Ali Baig, whom Quine reportedly kidnapped and fatally shot in February 1980, said she was disgusted by the news.
"It's kind of like a slap in the face," she said.
After the rehabilitation period, Quine will be transferred to a women's prison, according to Terry Thornton, a spokeswoman for the California Department of Corrections and Rehabilitation.