The city will pay $11.89 million in backpay to a group of about 3,500 current and former employees of the Department of Parks and Recreation who claimed they were victims of racial discrimination. As part of the settlement of the longstanding discrimination suit in U.S. District Court in Manhattan, the city will also pay about $8 or $9 million in attorney fees, a city official said.

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 Parks Commissioner Henry Stern, who left the post in 2002 and now runs a city watchdog group.

Among the allegations is the claim that Mr. Stern failed to order an investigation into the appearance of three nooses hung on parks department property even after complaints were lodged.

A similar suit filed by the U.S. Justice Department against the department was settled in 2005. That suit focused on a program instituted by Mr. Stern that attempted to recruit and advance young college graduates. Black and Hispanic career employees at the department complained that the program, called “Class of” favored whites.

In 2000, 92.9% of the Parks employees earning less than $20,000 a year were black or Hispanic, while 14.2% of those earning between $50,000 and $60,000 were black or Hispanic, according to court documents.