Canada's government has announced that it will compensate hundreds of Indigenous communities with more than $2 billion for the nearly a century of abuse that occurred in residential schools.

About 150,000 children were placed by the Canadian government into 139 residential schools, most of which were run by the Catholic church, from the late 1800s until the 1990s, where they were separated from their families, languages, and cultures.

Thousands are thought to have perished from sickness, hunger, or neglect, and many were subjected to physical and sexual abuse.

The C$2.8 billion ($2.1 billion) settlement, which came about as a consequence of a class action lawsuit brought by 325 Indigenous groups, would be put into a non-profit trust that is not controlled by the government.

According to a news release, it would be used to "revitalize Indigenous education, culture, and language - to support survivors in healing and reconnecting with their heritage".

"It has taken Canada far too long to own up to its history, own up to the genocide it committed and recognize the collective harm caused to our nations by residential schools," Garry Feschuk, an Indigenous leader who is one of the plaintiffs in the suit said. "It is time that Canada not only recognize this harm, but help undo it by walking with us. This settlement is a good first step," he added.

As Canada deals with its troubled colonial past, the discovery of hundreds of unmarked graves at the locations of the former schools during the past two years has brought the legacy of those institutions back into the public eye. The most recent discovery, which was made earlier this month, was one of more than 1,300 burials. According to the Star Blanket Cree community, ground-penetrating radar in Lebret, Saskatchewan, has identified over "2,000 areas of interest" that require in-depth investigation.

On the premises of a former residential school in the western Canadian hamlet, a piece of a child's jawbone from about 125 years ago has already been located. The search regions were chosen close to the Catholic-run residential school, which was operational until 1998.

"The residential school system decimated our languages, profoundly damaged our cultures, and left a legacy of social harms. The effects go beyond my generation. It will take many generations for us to heal," Shane Gottfriedson, another Indigenous leader and plaintiff said.

"We believe that all survivors deserve justice and the compensation to which they are owed," Marc Miller, federal minister of Crown-Indigenous Relations in the press release said.