Penn State's football team is getting back 112 wins wiped out during the Jerry Sandusky child molestation scandal and the late Joe Paterno has been restored as the winningest coach in major college football history.
The NCAA announced the new settlement with the school weeks before a scheduled trial on the legality of the 2012 consent decree it will replace.
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The new deal also directs a $60 million fine to address child abuse be spent within Pennsylvania and resolves that lawsuit.
The NCAA board of governors approved the settlement, said association spokesman Bob Williams. The Penn State board was discussing the deal Friday afternoon.
The announcement follows the NCAA's decision last year to reinstate the school's full complement of football scholarships and let Penn State participate in post-season play, and comes just days after a federal judge declined to rule on the consent decree's constitutionality.
The NCAA said continuing the litigation would only delay the distribution of funds to sex abuse survivors.
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"While others will focus on the return of wins, our top priority is on protecting, educating and nurturing young people," said Harris Pastides, University of South Carolina president and member of the NCAA board.
The Paterno family released following the proposed settlement announcement:
"Today is a great victory for everyone who has fought for the truth in the Sandusky tragedy. The repeal of the consent decree and the return of the wins to the University and Joe Paterno confirm that the NCAA and the Board of Trustees acted prematurely and irresponsibly in the unprecedented sanctions the NCAA imposed on the University, the players, coaches and the community.
"This case should always have been about the pursuit of the truth, not the unjust vilification of the culture of a great institution and the scapegoating of coaches, players and administrators who were never given a chance to defend themselves.
"For nearly three years, everyone associated with Penn State has had to bear the mark of shame placed upon the institution by the NCAA. It was a grievously wrong action, precipitated by panic, rather than a thoughtful and careful examination of the facts.
"Fortunately, through the tenacious efforts of Senator Jake Corman and Treasurer Rob McCord, a large measure of the wrong has been righted. This is a major victory in our continued pursuit of justice for Penn State. The victims deserve the truth as do those who have been smeared by the deeply flawed Freeh report, which served as the basis of the actions by the Board Trustees and Penn State.
"Through our pending litigation, we intend to continue the job of uncovering the full truth in this case."
The consent decree sprung from the scandal that erupted when Sandusky, a retired football assistant coach, was accused of sexually abusing boys, some of them on Penn State's campus.
It had eliminated all wins from 1998 — when police investigated a mother's complaint that Sandusky had showered with her son — through 2011, Paterno's final season as head coach after six decades with the team and the year Sandusky was charged.
In September, the NCAA announced it was ending the school's ban on post-season play and restored its full complement of football scholarships earlier than scheduled.
The restored wins will include 111 under Paterno, who died in 2012, and the final victory of 2011, when the team was coached by defensive coach Tom Bradley. It would return Paterno's record to 409-136-3.
The consent decree had also called for Penn State to provide $60 million to fight child abuse and combat its effects. The lawsuit scheduled for trial next month began as an effort by two state officials to enforce a state law that required the money to remain in Pennsylvania.
Under the proposed settlement, the money will remain in Pennsylvania.
As part of the new proposal, Penn State acknowledges the NCAA acted in good faith.
"We acted in good faith in addressing the failures and subsequent improvements on Penn State's campus," said Kirk Schulz, chair of the NCAA board of governors. "We must acknowledge the continued progress of the university while also maintaining our commitment to supporting the survivors of child sexual abuse."
The 2012 consent decree was signed by Penn State's then-president, Rodney Erickson, a month after a jury convicted Sandusky and shortly after former FBI director Louis Freeh released the scathing results of a university-commissioned investigation into the Sandusky matter.
Its unprecedented penalties drew heated and sustained opposition by Penn State alumni and fans who argued the Freeh report was factually incorrect, defended Paterno's handling of the Sandusky scandal, noted it punished people who had nothing to do with Sandusky and said that the school's athletics program had been considered a national model.
In recent months, emails and other documents have been attached to court filings by the NCAA and the plaintiffs, state Senate Majority Leader Jake Corman and state Treasurer Rob McCord.
In one, an NCAA official described its pursuit of the penalties as "a bluff" and said asserting jurisdiction would be "a stretch." Other records documented that Penn State narrowly avoided a multi-year "death penalty" which would have suspended the college football powerhouse from playing at all.
Corman signed off on the proposal, the senator said at a news conference in Harrisburg.
"The fact of the matter was, an evil predator operated in our community for years and everyone missed it," Corman said. "The NCAA has surrendered. The agreement we reached represents a complete victory for the issue at hand."
Sandusky was convicted in 2012 of 45 counts and he is now serving a 30- to 60-year prison sentence. He maintains his innocence.
Paterno's surviving family members and others had been pursuing another lawsuit over the consent decree. That lawsuit was narrowed by the judge so that it now includes the family, former assistant coaches Jay Paterno and Bill Kenney, and former trustee Al Clemens. Former players, faculty and trustees were removed as plaintiffs.
