The Obama administration on Tuesday proposed spending more than $3 billion to settle claims dating back more than a century that American Indian tribes were swindled out of royalties for oil, gas, grazing and other leases.

Under an agreement announced Tuesday, the Interior Department would distribute $1.4 billion to more than 300,000 Indian tribe members to compensate them for historical accounting claims, and to resolve future claims. The government also would spend $2 billion to buy back and consolidate tribal land broken up in previous generations. The program would allow individual tribe members to obtain cash payments for land interests divided among numerous family members and return the land to tribal control.

The settlement also would create a scholarship account of up to $60 million for tribal members to attend college or vocational school.

If cleared by Congress and a federal judge, the settlement would be the largest Indian claim ever approved against the U.S. government _ exceeding the combined total of all previous settlements of Indian claims.

Last year, a federal judge ruled that the Indian plaintiffs are entitled to $455 million, a fraction of the $47 billion or more the tribes have said they are owed for leases that have been overseen by the Interior Department since 1887.

President Barack Obama said settlement of the case, known as Cobell v. Salazar, was an important step to reconcile decades of acrimony between Indian tribes and the federal government.

"As a candidate, I heard from many in Indian Country that the Cobell suit remained a stain on the nation-to-nation relationship I value so much," Obama said Tuesday in a written statement. "I pledged my commitment to resolving this issue, and I am proud that my administration has taken this step today."

Interior Secretary Ken Salazar called settlement of the 13-year-old case a top priority for him and Obama and said the administration worked for many months to reach a settlement that is both honorable and responsible.

"This historic step will allow Interior to move forward and address the educational, law enforcement, and economic development challenges we face in Indian Country," Salazar said.

Elouise Cobell, a member of the Blackfeet Tribe from Montana who was the lead plaintiff in the case, called the proposed settlement crucial for hundreds of thousand of Native Americans who have suffered for more than a century through mismanagement of the Indian trust.

"Today is a monumental day for all of the people in Indian Country that have waited so long for justice," said Cobell, who appeared at a news conference Tuesday with Salazar, Attorney General Eric Holder and other U.S. officials.