Crown-Indigenous Relations and Northern Affairs Canada have released a statement stating that the government will contribute C$2.8 billion ($2.1 million) to a trust for non-profit purposes.
The statement stated that the trust will be independent of the government and guided by the Four Pillars created by the Representative Plaintiffs.
It stated that the government was committed to addressing collective harm caused and lost language, culture, heritage and heritage by residential schools.
It stated that the Four Pillars are the revival and preservation of Indigenous languages, the protection and promotion heritage, and wellness for Indigenous peoples and their members.
As part of the wider notice plan, further information about the terms of settlement will be made public over the next month.
According to the release, the parties will appear before the Federal Court on February 27, to ask for approval of the settlement terms.
Official figures show that at least 150,000 First Nations, Inuit and Metis children were removed from their communities and families between 1831-1898 to attend residential schools. There, they had to give up their languages, beliefs and cultures.
Many were victims of physical, emotional and sexual abuse. Many never returned home.
Due to insufficient records, the number of school-related death is unknown.
There are estimates ranging from 3,200 to more than 30,000, most of them due to disease.