The U.S. government will pay the Navajo Nation $554 million to settle long-standing claims that it mismanaged funds and natural resources on the tribe's reservation for years.

The settlement, which is set to be formally announced on Friday at a ceremony in Window Rock, Ariz., is the largest sum ever paid by the federal government to an Indian tribe in such a case.

It involves claims dating back more than 50 years regarding the government's oversight of land it holds in trust for the Navajo Nation and is leased for a variety of uses such as grazing and oil-and-gas development.

"This historic agreement resolves a long-standing dispute between the United States and the Navajo Nation, including some claims that have been sources of tension for generations," Attorney General Eric Holder said Wednesday in a statement. "It will provide important resources to the Navajo Nation. And it fairly and honorably resolves a legal conflict over the accounting and management of tribal resources."

The settlements have resulted in payouts of more than $1 billion. Tribal officials hope the money will help ease the poverty that has long plagued Indian country.

Under the agreement with the Navajo, the tribe will drop its lawsuit in return for the $554 million settlement, and will forego further litigation involving the mismanagement of tribal trust resources by the federal government.

Navajo officials first announced that the tribe had agreed to the deal last spring. Navajo Nation President Ben Shelly said the tribe would host town hall meetings with members to determine how the money would be spent.

"The trust litigation has been a protracted battle, and in the end, it was a victory for tribal sovereignty," Mr. Shelly said Wednesday in a statement. "The Navajo Nation has worked tirelessly for many years to bring this issue to a close."


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