Organizers of the New York City Marathon have reached a multimillion-dollar insurance settlement for the cancellation of last month's race, according to people with knowledge of the process.

The deal will allow the New York Road Runners, the club that has put on the event since 1970, to release its restitution plan for the runners and sponsors who registered for and invested in last month's race, which was canceled in the wake of Sandy. An announcement could come by the end of the week.

The...