BP is to outlay £4.9 billion on thousands of people hit by by the oil giant's Gulf of Mexico disaster.
The company said it expected the money - 7.8bn dollars - to come from the 20bn-dollar (£12.6bn) compensation fund that it set up following the Deepwater Horizon oil rig explosion in 2010, the worst spill in US history.
BP stressed today the proposed settlement was "not an admission of liability".
Bob Dudley, BP Group's chief executive, said: "From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region and we've worked hard to deliver on that commitment for nearly two years.
"The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast."
BP still has to resolve claims by the US government, Gulf states and its partners in the doomed Deepwater Horizon project, in which pressure from a well a mile below the ocean's surface blew up a massive drilling rig, killing 11 men and spewing oil into the sea for nearly three months.
The settlement will have no cap to compensate the complaints, who include thousands of fishermen who lost work, but BP's £4.9bn estimate makes it one of the largest class-action settlements.
After the Exxon Valdez disaster in 1989, the company ultimately settled with the US government for one billion dollars, which would be about 1.8 billion (£1.1bn) today.
The 2010 spill exposed oil industry failings and forced BP chief executive Tony Hayward to step down.
The Gulf of Mexico spill soiled sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas to commercial fishing.
After several attempts to cap the well failed, engineers were finally successful on July 15, halting the flow of oil into the Gulf after more than 85 days.
Following the disaster, the main targets of legal action were BP, Transocean, Halliburton and Cameron International, maker of the well's failed blow-out preventer.
BP, the majority owner of the well that blew out, was leasing the rig from Transocean.
The US government sued some of the companies involved in the drilling project and opened a separate criminal investigation, but that probe has not resulted in any charges.
The companies also sued each other, but some of those cases were settled last year. In one pending lawsuit, BP has sued Transocean for at least 40 billion dollars (£25.3bn) in damages.
A trial in the case, due to begin on Monday, has now been postponed for a second time, with no new date immediately set.
BP was due to be in the dock in New Orleans next week alongside contractors Halliburton and Transocean as a single judge decided who was to blame for what happened when the rig exploded.
The company was to face the wrath of the US government, several states, local authorities and hundreds of independent plaintiffs in a hearing before federal judge Carl Barbier.
Judge Barber said the settlement would "likely result in a realignment of the parties".
He said the trial was being adjourned "in order to allow the parties to reassess their respective positions".
BP has so far paid out 7.5bn dollars (£4.7bn) in clean-up costs and compensation.