In a sweeping legal settlement, the Tennessee Valley Authority has agreed for the first time to reduce its overall capacity to generate coal-fired electricity, promising to close 18 of its coal-burning generators over the next six years while spending $3 billion to $5 billion on pollution controls on any remaining units that use coal.

The accord, announced Thursday by the Environmental Protection Agency, will bring about one of the most significant cuts in coal-fired power generation by any utility that relies heavily on coal in its fuel mix. The closings will eliminate 16 percent of the authority’s coal-fired capacity, and the accord holds out the prospect that some or all of another 18 units will shut down as well, for a total loss of as much as a third of the authority’s coal-burning capacity.

By the end of 2017, the utility’s emissions of nitrogen oxides, a crucial component in smog and ground-level ozone, will be reduced by at least 69 percent, and sulfur dioxide emissions will be cut by 67 percent, the E.P.A. said, compared with 2008 levels. Sulfur dioxide can react with other compounds to form ultrafine particles, which are associated with heart and lung disease.

The actions dictated in the sweeping 120-page settlement, reached with four states and three environmental groups that sued the T.V.A. over air pollution, signal a fundamental shift for an agency that was created during the Depression to bring electricity to rural America In the 1960s and ’70s, it became one of the largest users of coal in the utility industry. Coal makes up more than half of the fuel that the utility burns to generate electricity for nine million people.