The Australian government has agreed to compensate 1900 asylum seekers currently or formerly held at the Manus Island detention centre, in what may be Australia's largest ever human rights-related settlement.
Lawyers Slater and Gordon confirmed the Commonwealth had agreed to reach a conditional settlement of $70 million plus costs, to be distributed to asylum seekers based on the length of their detention and severity of their alleged injuries.
It is understood costs will exceed $20 million.
Immigration Minister Peter Dutton put the blame back on Labor, which reopened the Manus Island detention centre in 2012, but said settling the case was the "prudent" decision.
"To date, Australian taxpayers have paid more than $13.7 billion to clean up Labor's loss of control of our borders. Today another $90 million was added to that bill," he said.
"An anticipated six month legal battle for this case would have cost tens of millions of dollars in legal fees alone, with an unknown outcome. In such circumstances a settlement was considered a prudent outcome for Australian taxpayers."
In settling the case, the government will avoid a long and potentially damaging trial, which was set to last about six months and reveal explosive claims about life and conditions at the Manus Island regional processing centre.
The trial was due to begin in May but was twice delayed, fuelling speculation the parties were headed for settlement.
The lead plaintiff, former Manus detainee Majid Karami Kamasaee, claimed on behalf of the group he had been mistreated by the Commonwealth and its contractors on Manus Island during 11 months of detention there in 2013-14.
In a statement read by his lawyers, Mr Kamasaee said his treatment on Manus Island was "degrading and cruel", with limited access to medical treatment he needed for severe burns he had sustained in Iran as a child.
"I came to Australia seeking peace, but I was sent to Manus, which was hell," he said. "Every day in the harsh sun, my skin felt like it was on fire. I was in pain every minute of every day ... I cried every night until I had nothing left.
"This case is not just about me, it is about everyone who has been trapped on Manus Island. Our voices have never been listened to, but today we are finally being heard."
In a 166-page statement of claim, lawyers had alleged detainees were housed in lacklustre facilities that were dirty, overcrowded and overheated, were subject to violent and anti-social behaviour from security staff and other detainees, and routinely had insufficient drinkable water, hygiene products and medications, among many other complaints.
A further claim of false imprisonment was added to the class action last year. Mr Dutton said the Australian government strongly refuted and denied the alleged claims, and settlement was not an admission of liability.
Slater and Gordon principal lawyer Andrew Baker said he believed the settlement was the largest for a human rights case in Australian history.
He thanked the witnesses who came forward including doctors, security guards and detainees who gave evidence.
Lawyers from the firm will visit Manus Island soon to explain the result to detainees.
Slater and Gordon group leader Rory Walsh said the "strong message" from the asylum seekers was to accept the money and avoid a lengthy trial.
"We think it is a very good and strong outcome and we think the court will have no hesitation in approving this figure," he said. "When we were offered sufficient money - and we were - we had no hesitation in taking it."
It is not known how much of the settlement amount will be paid by each of the defendants: the Australian government and contractors G4S and Transfield (now Broadspectrum). Mr Walsh said the carve up was confidential and a matter for the defendants.
Separate legal action in the Papua New Guinea Supreme Court, being run on behalf of current detainees in parallel to the Victorian case, is now in question. PNG lawyer Ben Lomai said he would await the instructions of his clients.
"If Slater and Gordon settle with the Commonwealth then it is likely that we will seriously consider withdrawing the proceedings in PNG," Mr Lomai told Fairfax Media earlier on Wednesday.
