Part of compensation includes around $15 billion for potentially hundreds of thousands of First Nations children who were removed from their families, who did not get services or who experienced delays in receiving services.
Canada has announced two agreements totalling $31.5 billion to compensate First Nations children who were taken from their families and put into the child welfare system and to reform the system that removed them and deprived them of services they needed.
The agreements include around $15 billion for potentially hundreds of thousands of First Nations children who were removed from their families, who did not get services or who experienced delays in receiving services. More than $15 billion is to reform the system over the next five years.
The agreements come almost 15 years after the First Nations Child and Family Caring Society brought forward a human rights complaint.
The Canadian Human Rights Tribunal repeatedly found child and family services discriminated against First Nations children, in part by under-funding services on reserves so children were removed from their homes and taken off-reserve to get those services.
Canada admitted its systems were discriminatory but repeatedly fought orders to pay compensation and fund reforms, including an appeal it filed last year.
Canada is also fighting a class-action lawsuit on behalf of First Nations children that the compensation agreement seeks to resolve.
Justice Minister David Lametti said on Tuesday the government will drop its appeals once the agreements are finalized in the months ahead.
The reform deal includes $1,967 in preventive care per child and provisions for children in foster care to receive support beyond age 18.
Funding aimed at reform and preventive services should start flowing in April but may not address deep-rooted problems, said Cindy Blackstock, executive director of the First Nations Child and Family Caring Society.
"I see it as words on paper," she told Reuters news agency.
"I judge victory when I can walk into a community and a child is able to say to me, 'My life is better than it was yesterday.' Nothing in these words actually changes children's lives until it's implemented."
Lawyer David Sterns, representing harmed First Nations children and families, said during a press conference that this would be the largest class-action settlement in Canada's history.
"The enormity of this settlement is due to one reason, and one reason only. And that is the sheer scope of the harm inflicted on class members," he said.
At the press conference Indigenous Services Minister Patty Hajdu vowed to end discrimination against First Nations children, who are over-represented in foster care across Canada.
"Canada's decision and actions harmed First Nations children, families and communities," she said. "Discrimination caused intergenerational harm and losses. Those losses are not reversible. But I believe healing is possible."