Updated, 4:14 p.m. | After 14 months of negotiation, New York City has agreed to pay more than $21 million to settle a federal class-action discrimination lawsuit filed against the Department of Parks and Recreation and will make “major changes in certain of its personnel practices” as part of the settlement, the NAACP Legal Defense and Educational Fund announced today. The settlement, which is expected to be ratified by Judge Denny Chin in United States District Court in Manhattan, includes $11.9 million in back pay and compensatory damages to a group of about 3,500 former and current workers.

“We decided that it would be better to settle than to litigate,” Mayor Michael R. Bloomberg told reporters at a news conference in Chinatown today. “It was something that took place a long time ago and I think we are satisfied that our procedures today in that department, and I think in all departments, do not discriminate against anybody.”

The settlement could signal the end of a case that dates to 1999, when 20 black or Hispanic parks workers filed complaints with the federal Equal Employment Opportunity Commission asserting that the department — under the Giuliani administration and the parks commissioner at the time, Henry J. Stern — had illegally discriminated on the basis of race and national origin in assigning and promoting employees. In February 2001, the E.E.O.C. found “reasonable cause” to believe the discrimination had occurred, clearing the way for the lawsuit.

The suit was a particular blow to Mr. Stern, a colorful former City Council member who served as parks commissioner under Mayor Edward I. Koch and Mayor Rudolph W. Giuliani, uses the name StarQuest and sends out regular e-mail messages with political commentary through a small nonprofit group he established, New York Civic. The plaintiffs complained that they were bypassed by promotions because of a recruiting program Mr. Stern had started to recruit young graduates of elite colleges — nearly all of them white — to fill positions in the agency. Embarrassed by the publicity, the Giuliani administration for a while ordered Mr. Stern to remain silent.

Then, in June 2002, the Parks Department — now under a new commissioner, Adrian Benepe, reporting to a new mayor, Michael R. Bloomberg — received another blow: a Justice Department lawsuit that accused the agency of of discriminating against black and Hispanic workers for the past seven years by favoring whites for promotions — including those who were part of the special recruiting program. Time and again, the suit contended, the Parks Department failed to follow any objective guidelines for determining promotions and filling management positions, failed to post notices of job openings, and ”rarely, if ever” conducted the required interviews for vacancies.

The department said its practices had changed, but documents provided as part of the federal lawsuit detailed the extent of the discriminatory practices. In June 2005, the city settled the federal lawsuit, agreeing to broad changes in its promotion practices, including posting job vacancies so that all employees would be aware of them and making promotions on the basis of positive performance evaluations and other proof of merit.

Meanwhile, the original 2001 employees’ lawsuit, known as Wright v. Stern, continued to drag on.

“Today’s settlement is a clear victory for those who were denied equality in the workplace for so long,” said Theodore M. Shaw, director-counsel and president of the defense fund, which uses the initials L.D.F. and is independent of the NAACP fund. “L.D.F. commends the black and Latino workers of the New York City Department of Parks and Recreation who stood up to this injustice and had the courage to fight for change.”

Since December 2006, the defense fund worked with several lawyers — including Cynthia Rollings of Beldock Levine & Hoffman and Lewis M. Steel — to reach a settlement with the city.

The settlement announced today includes just $11.9 million to be distributed to the class of plaintiffs, which includes about 3,500 former and current parks employees; about $8 million in lawyers’ fees, and about $1 million in litigation expenses.

Under the settlement, the city has agreed over the next three years to establish ways for employees to obtain review of salary differences that they believe are discriminatory; to obtain adjustments in those salaries if disparities are not justified; to increase pay in certain specific job titles; to train interviewers to ensure that employees who apply for promotions are treated fairly and objectively; and to examine the process by which managers are selected in the future.

Robert H. Stroup, head of the economic justice group at the legal defense fund, said the pay disparities arose in large part because the Parks Department had used a system of provisional promotions that often ended up being permanent and were less transparent than promotions made through regular civil service procedures. The settlement calls for the Parks Department to show greater transparency in promoting managers. Also, as a result of the settlement, employees feel they are not being paid as much as a colleague for the same work, they will be able to bring the matter to the department for a formal review.

Georgia Pestana, chief of the Labor and Employment Law Division at the city’s Law Department, said in a statement:

This agreement should not be construed as an admission of wrongdoing by the Parks Department. The City defended the Parks Department in this litigation for almost a decade, because we do not believe it discriminated or retaliated against its African-American and Hispanic employees. Nonetheless, the City must evaluate the risks presented by a lengthy, multi-phased trial and seek to attain a result in its best interests. We believe this proposed settlement achieves that objective.

Mr. Stern, who was parks commissioner from 1983 to 1990 and again from 1994 to 2002, said in a phone interview today, “We never practiced discrimination on the basis of race, except for affirmative action.” He added, “We deny any discrimination and thank the corporation counsel.”

Mr. Stern said of the recruiting program: “The program was to get young college graduates to work long hours at low salaries. The problem was you couldn’t black graduates to work for $22,000 or $25,000, either because they had loans or were offered better jobs by companies that wanted them. Nonetheless, we never turned one down – we accepted every black graduate that applied to the program. We went out of our way to recruit at historically black colleges. Any black employee who wanted to could have asked to be in this program. None of them asked to because they were being paid more.”