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More than 1,900 detainees had alleged they suffered serious physical and psychological injuries during their time in the Australian government's offshore asylum seeker detention center on the Papua New Guinea island, between 2012 and 2016.
Australian law firm Slater and Gordon, who represented the plaintiffs, confirmed Wednesday a deal had been struck with the government, although it had yet to be approved by the court.
Majid Kamasaee, a 35-year-old Iranian detainee, who was held on the center for 11 months after fleeing Iran, was the lead plaintiff in the case.
"I came to Australia seeking peace but I was sent to Manus which was hell," Kamasaee said in a statement after the announcement.
"I was in pain every minute of every day and I cried every night until I had nothing left."
Australia has long been criticized for its offshore detention centers, including the one on Manus, where it has held thousands of asylum seekers and refugees since 2012 who have attempted to reach its shores.
Settlement could lead to other claims
The large settlement for the Manus detainees could leave the Australian government open to other class actions, including from asylum seekers held on Nauru, Ben Saul, University of Sydney Challis Chair of International Law, told CNN.
"They settled to make it go away so I think that does give a fairly good indication that even the government thinks the treatment of people in detention was not satisfactory by existing legal standard," he said.
Saul said about $70 million was a "substantial" settlement and provided some sort of vindication for outside observers who had been calling for compensation for years, including the United Nations.
"But 50,000 for losing years of your life into the black hole of illegal detention is hardly going to give you your life back," he said.
Slater and Gordon principal lawyer Andrew Baker told reporters Wednesday the detainees on Manus Island no longer had to "suffer in silence."
"Most were fleeing religious persecution and violence and came to Australia seeking protection, only to be denied their basic human rights," he said.
'A stunning admission'
Opponents to Australia's offshore detention centers for asylum seekers were quick to celebrate the settlement.
"The decision by the Australian Government to pay compensation ... is a stunning admission of the barbaric conditions in the detention center," independent politician Andrew Wilkie said in a statement.
"It's unambiguous proof of the need to shut down all offshore processing immediately ... Australia's response to asylum seekers is unethical and illegal under international law."
Australian Greens party Immigration spokesman Nick McKim said in a statement the settlement showed the government was responsible for the deliberate harm suffered by detainees.
"By accepting this settlement, (Immigration Minister) Peter Dutton takes responsibility for the deaths, the serious injuries, the torture and the ongoing harm to Manus Island detainees," he said.