Thousands of workers from Midland engineering company Turner and Newall could be eligible for compensation following the setting up of a #36 million fund.
The proposed fund will cover those who have developed an asbestos-related disease at the company which collapsed in 2001.
The money, which could also go to family members who lost relatives, will be made available after an agreement was struck with insurers Royal & Sun Alliance and a syndicate at Lloyds of London.
A meeting is due to take place next month for employees to decide whether to accept the settlement, with individual payments likely to run into thousands of pounds.
Andy Shaw of Black Country law firm Higgs & Sons said: "The scheme has only been proposed at this stage and everyone who has a potential claim has a right to vote in September to decide whether it is agreed.
"Those individuals should have received an information pack from the scheme's administrators, Kroll. If the scheme is approved by the members it will have to go to the High Court for approval in September 2006."