New York City and a group of contractors have agreed to pay up to $657 million to more than 10,000 workers who alleged that rescue and cleanup efforts around the World Trade Center made them sick.

The settlement, announced Thursday night, sets up a system to compensate thousands of firefighters, police officers, contractors and volunteers based on the severity of their medical problems. "This settlement is a fair and reasonable resolution to a complex set of circumstances," New York Mayor Michael Bloomberg said in a statement.

The awards would range from $3,250 to seven figure sums. By agreeing to the settlement, the plaintiffs release the city and its contractors from any future damage claims.

Mr. Bloomberg commissioned a task force in 2006 to develop a coordinated plan for responding to the massive health problems associated with the Sept. 11, 2001, terrorist attacks.

That panel projected roughly 43,000 people might ultimately seek treatment for exposure to the dust and smoke that permeated lower Manhattan after the towers toppled.