The city will dole out $11.89 million in back pay to a group of about 3,500 current and former employees of the Department of Parks and Recreation who claim they were victims of racial discrimination. As part of the settlement of the long-standing discrimination suit in U.S. District Court in Manhattan, the city will also pay about $9 million in fees and costs to five law firms representing the plaintiffs.

“We decided that it would be better to settle than to litigate,” Mayor Bloomberg said yesterday. “It was something that took place a long time ago and I think we are satisfied that our procedures today in that department and, I think, in all departments do not discriminate against anybody.”

A lawyer for the city, Georgia Pestana, said the settlement was not an admission of wrongdoing. “The City defended the Parks Department in this litigation for almost a decade, because we do not believe it discriminated or retaliated against its African-American and Hispanic employees. Nonetheless, the City must evaluate the risks presented by a lengthy, multi-phased trial and seek to attain a result in its best interests. We believe this proposed settlement achieves that objective, ” Ms. Pestana said in a statement yesterday.

A lawyer for the NAACP Legal Defense and Educational Fund, which represented the workers in the lawsuit, Robert Stroup, called the decision “a real step in the right direction.”

“We think that it corrects problems that existed in the past and, going forward, creates the opportunity for parks employees and parks management to achieve more meaningful pay and selection decisions,” Mr. Stroup said yesterday.

Black and Hispanic parks employees claimed in the suit that the department failed to promote or pay them on an equal footing with white employees. The suit scrutinized the tenure of a city parks commissioner, Henry Stern, who left the post in 2002 and now runs a watchdog group, New York Civic. A similar suit filed by the federal government that was settled in 2005 alleged that a parks department recruitment program for recent college graduates discriminated against minorities. In 2000, 92.9% of the parks employees earning less than $20,000 a year were black or Hispanic, and 14.2% of those earning between $50,000 and $60,000 were black or Hispanic, according to court documents.

Yesterday, Mr. Stern defended the parks department. “We have never discriminated on the basis of race,” he said. “The Corporation Counsel speaks for us, we thank him for his vigorous 10-year defense of the agency against these accusations.”