A federal judge in New Orleans approved a final order for an estimated $20 billion settlement, resolving years of litigation over a BP oil spill in the Gulf of Mexico back in 2010.

According to CNBC, US District Judge Carl Barbier established the approval of the settlement which was confirmed on Monday. The settlement which was first announced in July amounts to $5.5 billion in civil Clean Water Act penalties and billions more to cover the damage affecting the environment.  The reported settlement is said to be paid over a 16-year period.

Judge Barbier had set the stage for the settlement with a previous ruling that BP had been grossly negligent in the offshore rig explosion that caused a 143m-gallon spill, killing 11 workers. Bob Dudley, chief executive of BP, called the settlement a landmark step forward for all people and businesses involved despite the fact that the oil company had a $6.3 billion quarterly loss when the settlement was first announced.  Dudley said the numbers are huge, but the company can, at least, start planning for the future, reports The Guardian.

Although the oil company announced that it is cutting 7,000 jobs, Dudley earned almost $20 million in 2015 - receiving a 20 percent hike despite record losses.

BP reached an agreement with private attorneys in 2012 for residents and businesses who claimed that the spill cost them money.  The Hindu Times reported that the agreement, which doesn't contain any cap, led to a protracted court battle over subsequent payouts to businesses.

Former chief of US Justice Department's environmental crime action, David Uhlmann, said Judge Barbier's ruling ends a long and a sad chapter in American environmental history. Uhlmann added that the question that remains is whether people have learned enough from the tragedy to prevent similar environmental disasters in the future.

Although the settlement has gained mostly positive reactions, there were still lingering complaints that some of the BP payments may be tax-deductible for the oil giant. While court documents say that the civil penalties will not be tax deductible, other settlement costs could be.