Correspondent Nick Bryant: "Biggest settlement ever"

The deal, which will be signed on Monday, will be the biggest civil settlement in US legal history.

The money will be used to pay for treatment for smoking-related illnesses and to launch a programme to discourage young people from smoking.

Tobacco industry spokesman Steve Duchayne: "Healthcare and initiatives"

It was originally drafted by eight states with the four largest tobacco companies, and announced last Monday. The other states had until Friday to accept or reject the deal.

Four states - Mississippi, Florida, Texas and Minnesota - have already made their own deals with the big tobacco companies for a total of $40bn.

Advertising restrictions

The agreement imposes new curbs on tobacco advertising and forces the tobacco giants to pay for anti-smoking initiatives.

Tobacco farmers are a powerful lobby in Congress

It bans the use of cartoon characters such as the once-popular Joe Camel although the cowboy-styled Marlboro man is likely to survive.

One of the architects of the deal, Christine Gregoire, the Attorney General of Washington State, on Monday hailed what she said were "the most sweeping changes in business practices ever imposed on an industry".

"It will change the way we see tobacco," she said.

Damien Fowler reports from New York

"Under this proposal - billboards: gone; taxi and transit adds: gone; hats, shirts, backpacks with tobacco brand names: gone."

"This plan will get big tobacco off the back of our kids," added New York state Attorney General Dennis Vacco.

Congressional opposition

President Clinton welcomed the deal as a "milestone".

But he said he would continue to work for further legislation to regulate the tobacco industry and called on the new Congress, sitting in January, to work with him.

President Clinton: "It is up to Congress to finish the job"

Mr Clinton wants the Federal Food and Drug Administration (FDA) to impose tough new curbs on the tobacco companies.

However, he is likely to meet stiff opposition from Congressmen whose constituencies include tobacco farmers and producers.

The agreement is the outcome of years of campaigning to get American tobacco companies to address the public health problems smoking has caused.

Some health campaigners however say the companies are escaping too lightly and the new deal does not go as far as an earlier agreement that was rejected by Congress.

But Ms Gregoire said the agreement was an essential first step.