CANBERRA - The Australian government has reached a settlement of around A$90 million ($68 million) with more than 1,900 asylum-seekers who sued over their treatment at an immigration camp in Papua New Guinea, a minister and lawyers said on Wednesday.

Australia refuses to resettle asylum-seekers who arrive by boat and pays the impoverished Pacific island nations of Papua New Guinea and Nauru to keep hundreds of them from the Middle East, Africa and Asia.

A trial by 1,905 asylum-seekers currently or formerly kept at camp at Manus Island in Papua New Guinea was to begin on Wednesday in the Victoria state Supreme Court and was scheduled to take six months.

The asylum-seekers were seeking damages for alleged physical and psychological injuries they say they suffered as a result of the conditions on Manus Island, as well as for false imprisonment following a Papua New Guinea court ruling that their detention was unconstitutional.

The camps on Manus and Nauru were once detention centers, but asylum-seekers are now allowed outside the fences.

Their lawyer David Curtain told the court they reached a settlement with the Australian government and the operators of the male-only Manus Island camp, G4S Australia and Broadspectrum.

The government and operators deny liability as part of the settlement and agreed to pay A$70 million plus the cost of three years of legal work behind the case, asylum-seeker lawyer Rory Walsh said.

Prudent outcome

Immigration Minister Peter Dutton said he expected the asylum-seekers' costs would add another A$20 million to the government's bill.

"An anticipated six-month legal battle for this case would have cost tens of millions of dollars in legal fees alone with an unknown outcome," Dutton said in a statement.

"In such circumstances, a settlement was considered a prudent outcome for Australian taxpayers."

Sudanese asylum-seeker Abdul Aziz Muhamat told the Australian Broadcasting Corp in Port Moresby, where he's receiving medical treatment, that he's "really happy" with the outcome.

"One thing that today I found out is, there are some people really down there in Australia, they care about us," he said.

Lawyer Andrew Baker said the money would be distributed according to how long asylum-seekers had spent on Manus and what they had endured.

"This settlement is an important step toward recognizing the extremely hostile conditions the detainees endured at Manus Island," Baker said.

He said "no amount of money will be able to fully recognize the terrible conditions these detainees have had to endure."

The United States is considering resettling up to 1,250 refugees from Manus Island and Nauru under a deal Australia struck with the US when Barack Obama was president.

Associated Press

Asylum-seekers look through a fence at the Manus Island detention center in Papua New Guinea. They successfully sued the Australian government over their treatment and conditions in the camp, which a lawyer described as "hostile" and "terrible". Provided By Reuters