Spoiler Alert, click show to read:
I get things like this all the time. I just declared war on them, and invaded their territory with two legions. I attacked their entire army (Which was sitting near the capitol) and destroyed it in a very close battle.
I couldn't attack immediately afterwards, so I held off from besieging the settlement. Their very next turn, this is the default offer they gave to me.
I didn't accept it, because I want the province, but still that's a pretty great offer! I keep seeing people who are saying diplomacy is terrible, but I get offers like this all the time.