A group of black farmers reached a $1.25 billion settlement with the U.S. Department of Agriculture over a longstanding civil-rights case that had cast a pall over the agency for decades.

In a conference call Thursday, Secretary of Agriculture Tom Vilsack said the settlement would close a "sordid chapter in USDA history."

"This is a very historic, emotional day for black farmers," said John Boyd Jr., president of the National Black Farmers Association who once traveled 200 miles in a mule-drawn wagon from Baskerville, Va., to Washington to raise awareness about black farmers. "But the [Obama] administration is going to have to help me finish the job."

Thursday's settlement, which remains contingent on the money being appropriated by Congress, stems from a 1997 class-action civil-rights lawsuit, Pigford v. Glickman, that was filed by three African-American farmers alleging the USDA had discriminated against them and other black farmers.

Among other things, the farmers claimed they were systematically denied USDA loans and farm subsidies by agency officers. Some farmers said that, even if they were awarded a loan, the agency took so long to allot it that time ran out to plant that season's crop and they were unable to repay other debts.

The Pigford case, which was filed in U.S. District Court for the District of Columbia, was settled in April 1999. Just over $1 billion was awarded to about 16,000 claimants.

The case was reopened after black farmers argued that thousands of additional farmers hadn't been given the opportunity to make claims. The 2008 Farm Bill included a provision that restored those farmers' access to settlement awards.

It isn't clear how many farmers could qualify for the payout, but it could be tens of thousands. Last year, President Barack Obama inserted a $1.15 billion request in his budget proposal to Congress. Lawmakers didn't appropriate the money then because no formal settlement was in place, said Thomas Perrelli, U.S. associate attorney general. "I don't think anybody in Congress doubts" the funds will be appropriated "expeditiously," he said.

Mr. Obama said in a statement released Thursday, "I look forward to a swift resolution to this issue, so that the families affected can move on with their lives."

The settlement is the latest in the Obama administration's push to focus on civil-rights issues and close out longstanding discrimination claims. In December, the administration proposed spending $3.4 billion to settle longstanding claims that the federal government mismanaged Americans Indians' trust funds.

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