The terms of the deal, announced by the Canadian government in a statement on Wednesday, were revised to broaden compensation eligibility and increase the amount from the initial C$20 billion agreed last year.
The agreement, which affects about 300,000 First Nations children, youth and families, aims to settle a complaint brought to a human rights tribunal more than 15 years ago against Canada over its funding for child welfare on reserves.
The tribunal ruled in 2016 that the federal government allocated fewer funds for child and family services of Indigenous people than for others, pushing more Indigenous children into foster care.
The federal government is responsible for funding child welfare services for children on First Nations reserves. Individual provinces fund child welfare services for non-native children and native children who do not live on reserves, creating a two-tiered system.
The First Nations Child and Family Caring Society and the Assembly of First Nations, an umbrella group for Canada’s largest Indigenous group, and the federal government will now seek to confirm the deal at the tribunal.
Once confirmed, it must be approved by a federal court before it can be implemented.
“This C$23 billion final settlement agreement is a long overdue turning point for so many thousands of families,” said Cindy Woodhouse, regional chief of the Assembly of First Nations Manitoba.
Canada’s Indigenous people have higher levels of poverty and a lower life expectancy than other Canadians, and are more often the victims of violent crime, addiction and incarceration.
Prime Minister Justin Trudeau pledged to repair relations with Indigenous Canadians after coming to power in 2015.
“This agreement represents real work towards Canada’s commitment to First Nations children past, present and future,” Canada’s Justice Minister David Lametti said in the statement.
($1 = 1.3456 Canadian dollars)