The mayor of Jiyuan said the city's air quality was improving
Officials in central China plan to relocate 15,000 residents after more than 1,000 children tested positive for lead poisoning, state media say.
Zhao Suping, mayor of Jiyuan city in Henan province, said the relocation would cost 1bn yuan ($146m), the official Xinhua news agency reported.
The residents live in about 10 villages around China's biggest lead smelter in Jiyuan.
Toxic emissions from the plant have been blamed for poisoning the children.
The children were moved away last week, and now the local government says a total of 15,000 people will be relocated.
The cost of the move will be borne by the lead company, officials have said.
The factory will keep operating, with its owners leasing the land surrounding the plant from the farmers, and setting up an exclusion zone for nearby villages.
Villagers say the government has not acted quickly enough to address their concerns - no timetable has been set for the relocation.
A resident of one village told Xinhua that high pollution levels were ignored in the quest for wealth.
"A few people got rich, but the whole village is poisoned," said 60-year-old Wang Shaozhou.
"How can we ignore people's health in the process of economic development?" Wang said.
The mayor of Jiyuan said the city's air quality had improved since 2003 when the city was officially listed as "seriously polluted".
Mayor Zhao told Xinhua there were plans to further reduce the pollution.
The poisoning in Henan is the latest in a series of toxic accidents that have left thousands of children sick across China.
According to the BBC's Quentin Sommerville in Beijing, Communist officials often overlook the damage that China's rapid industrialisation does to the local population.
Factories are often large contributors of local taxes, our correspondent says.