The scheme will cost the government about £11m
A £1,000 payment for all savers with collapsed bank Kaupthing Singer and Friedlander Isle of Man (KSF IOM) has been rubber stamped by the government.
The Early Payment Scheme, which was floated in December, was approved at Tuesday's sitting of Tynwald.
The scheme is expected to cost the Manx government £11m.
Depositors are able claim the payment by completing and submitting a form which is now available on the government's website.
More than 10,000 people are believed to have deposited money in KSF IOM.
The bank's licence was frozen on 8 October after its parent bank Kaupthing was nationalised.