People who were tortured under the military regime of General Augusto
Pinochet are to receive compensation from the Chilean Government.
Families of the disappeared are still looking for answers
Until now, compensation has only been paid to the families of people who were killed during the regime, which ran from 1973 and 1990.
The decision could benefit tens of thousands of Chileans, correspondents say.
Chilean President Ricardo Lagos says he wants to push his country's deeply divided population towards reconciliation by resolving past human rights issues on both sides of the conflict.
In a national address he said his plan, which requires congressional
approval, "does not bring a definitive solution" to the suffering of many Chileans during Mr Pinochet's rule but it is "a step toward reconciliation".
Congress is expected to approve the plan.
Members of the former military regime are being encouraged to give information.
President Lagos said courts would offer reduced or commuted sentences to soldiers who were only following orders under threats when they carried out abuses.
The offer would not be open to those who organised and ordered the abuses however.
"Many people who have information are still sunk in a cruel and persistent silence," said Mr Lagos.
He also said that pensions granted to some of the victims or their families, now averaging about $398 per month, would be increased by 50% and extended to more people.
Mr Lagos also wants to give the same benefits to relatives of soldiers killed in clashes with leftist guerrillas or
the victims of terrorist attacks.
Next month will be the 30th anniversary of the coup that installed General Pinochet.
At least 160 former members of the Pinochet regime are on trial accused of human rights abuses.
His military government claimed up to 3,000 lives during his 17-year rule which ended in 1990. Hundreds of bodies have never been found.
Chile's population is divided sharply between those who blame Mr Pinochet, now aged 87, for abuses and those who praise him for creating economic stability.