MINNEAPOLIS (AP) _ 3M Co. has agreed to pay the state of Minnesota $850 million to settle a case alleging the manufacturer damaged the state's natural resources and contaminated groundwater by disposing chemicals over decades.

Attorney General Lori Swanson announced the settlement Tuesday, a few hours after jury selection was halted on the day the trial was scheduled to begin.

Minnesota was seeking $5 billion from Maplewood, Minnesota-based 3M in a case that focused on the company's disposal of chemicals once used to make Scotchgard fabric protector and other products.

Swanson says the money will be used to address problems created by the chemicals, known as PFCs, in drinking water. The contaminated area is in suburbs east of St. Paul.