The US mining giant Newmont has agreed to pay Indonesia $30m in an out-of-court settlement over alleged pollution in North Sulawesi.
The money will be paid over 10 years to fund environmental monitoring and community development.
The Indonesian government will drop a civil case against Newmont, but a criminal trial of a top local executive will continue.
The civil suit had sought damages of $133m from the US firm.
But the case was thrown out by a court last November.
'Toxic metals'
Richard Ness, president of Newmont Minahasa Raya, went on trial in August in the criminal case, and faces a maximum 10-year jail sentence if convicted.
"This will not stop the ongoing criminal case," Chief Social Welfare Minister Aburizal Bakrie said after the out-of-court settlement was signed in Jakarta on Thursday.
Newmont Minahasa Raya and Mr Ness are accused of knowingly dumping waste on an island in North Sulawesi province, about 1,300 miles north east of Jakarta.
The Indonesian authorities claim local residents have suffered serious skin diseases and neurological disorders after being exposed to abnormally high levels of toxic metals including mercury and arsenic.
The firm, which began operations in the area in 1996, says it has fully complied with environmental regulations relating to waste removal from the mine, which closed in 2004.
It insists there is no credible scientific evidence pointing to any environmental pollution.
In its defence, the firm is expected to point to independent research - including a report commissioned by the World Health Organisation - arguing that no environmental damage was caused and that traces of heavy metal deposits found on villagers were within acceptable levels.
The trial follows the detention of five Newmont employees last year in relation to allegations of illegal dumping.
An Indonesian court subsequently ruled that the arrests were illegal.
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