LAKE ELMO, Minn. — The City of Lake Elmo and 3M announced Monday that they have reached an agreement in principle to settle a lawsuit that is pending between them in the United States district court.

The lawsuit accused 3M of dumping harmful substances that seeped into the city's water system.

The City is accepting $2.7 million and ownership of approximately 180 acres of land, which 3M will transfer to the City.

The money will be credited to the City's water account, which funds the maintenance, construction and operation of the water system.

The approximately 180 acres of land are located near the City's Public Work's Facility.

"We believe this is a fair and equitable settlement for both the City and 3M," Lake Elmo Council Member Justin Bloyer said. "The City is anxious to put this matter behind us and is looking forward to working together with 3M to ensure safe drinking water for our residents and businesses."

"We are committed to working with communities to protect our natural resources," Senior Vice President of 3M Research and Development John Banovetz said.