The world's top five music companies have agreed to pay $50m (£28m) in unclaimed royalties to artists including David Bowie and Dolly Parton.
Bowie is one of thousands of artists to receive extra royalty payments
Thousands of musicians will receive extra royalties as a result of a two-year investigation by New York Attorney General Eliot Spitzer.
Music companies including Sony, Warner and EMI failed to maintain adequate contact with artists, Mr Spitzer said.
Liza Minnelli and Sean "P Diddy" Combs will also receive extra payments.
"We have this misperception that artists have all gained enormous wealth by virtue of their success," Mr Spitzer said.
"But there are many artists who struggle, who have one successful song and they depend on those royalties."
The largest payment was almost $230,000 (£128,000) to the estate of Tommy Edwards, who recorded It's All in the Game, a global hit in 1958.
Edwards recorded the song for what was MGM Records, whose catalogue is now owned by Universal Music.
Other recipients include jazz saxophonist Gerry Mulligan, owed $78,000 (£43,000), and the Fontane Sisters, who were owed almost $107,000 (£59,500).
"The recording companies have an obligation to perform adequate due diligence and maintain information about the artists to whom they owe this money," Mr Spitzer said.
"What we found is that, quite simply, they were not doing it.
"Rather than perform the hard work and effort of tracking down the artists, they were letting these funds accumulate in their accounts."
Mr Spitzer said the record labels - Universal Music Group, Sony Music, EMI, BMG and Warner Music - responded rapidly to the investigation.
He added that $25m (£14m) had already been given to those who were owed money, and most of the remaining $25m would be returned in the "near term".
Warner Music said such royalties accounted for 0.01% of all of its royalties, while BMG said they accounted for less than 1%.
But music industry lawyer Bob Donnelly, who brought the issue to the attention of the attorney general, was more critical of the labels.
"I think there was a lot more money than was disbursed today," said Donnelly, who has represented jazz star Ornette Coleman and funk pioneer Bootsy Collins in such disputes.
"They have been making interest on this money for a long time."