The Victorian Supreme Court has formally signed off on a $89 million class action settlement for Thalidomide victims in Australia and New Zealand.

UK company Diageo has agreed to pay compensation to about 100 Thalidomide victims, providing them with care for the rest of their lives.

Diageo owns The Distillers Group which marketed the controversial morning sickness drug in Australia in the late 1950s.

Lawyer Peter Gordon told the court it was a fair and reasonable settlement.

Justice David Beach was told there had been unanimous support for the settlement from the claimants.

"None of the group will die wondering whether their claim was investigated," Mr Gordon said.

There was a smattering of applause as Justice David Beach officially approved the settlement.

The initial class action accused Diageo and Grunenthal of negligence for allowing the drug to be sold without proper testing and for failing to withdraw the drug from the market when the risks were revealed.

Legal proceedings against Grunenthal have been dismissed.

At no time did Grunenthal accept any wrongdoing on its part.

Victims on hand to witness court approval

There were a number of victims in the court to witness the formality, including Melbourne woman Lynette Rowe.

She was the public face of the lawsuit.

She was born with no arms or legs after her mother took the drug to treat morning sickness and anxiety during her pregnancy.

It took 50 years for the Rowe family to win recognition of the role the drug played in Ms Rowe's disabilities and to win compensation.

The drug was originally prescribed in the late 1950s as a sedative for pregnant women.

Later it was sold over the counter without a prescription.

The babies of these women were born with severe physical deformities.

Some have no limbs, they have damage to the nervous system, kidney and heart problems and have a reduced life expectancy.

It is estimated there were about 10,000 Thalidomide victims around the world.