American-based pharmaceutical company Pfizer has signed a settlement worth up to $75m (£45m) with the Nigerian state of Kano, a joint statement says.
It follows a long-running legal battle over allegations that children were harmed by an experimental drug, Trovan, during a meningitis outbreak in 1996.
Eleven children died and more than 180 others suffered serious illness.
Pfizer says the children were victims of meningitis, and maintains the drug saved lives.
The joint statement says: "We are pleased to announce that we have reached a final agreement to settle the Trovan litigation between Pfizer and the Kano state government."
It says they agree that settlement of the case is in the best interests of both parties because it "avoids the costs and distraction of protracted litigation".
The statement says there is no admission of liability by Pfizer in connection with the Trovan study in 1996.
The deal will see Pfizer underwrite several healthcare initiatives chosen by the state government in Kano, worth $30m.
There is also a fund which could disburse up to $35m to those who took part in the 1996 study.
And Pfizer has also agreed to reimburse Kano for $10m in legal costs.
The 1996 study was carried out during an epidemic of measles, cholera and meningitis in which more than 12,000 people are reported to have died.