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Sixty people lost their lives at the pesticide plant due to hazardous exposure to chemicals.
The companies have agreed to pay individual compensation to 1,068 former workers at the plant and provide them with lifetime medical care, which prosecutors estimated could total up to 420 million reais (£143 million).
Shell and BASF would also make a separate 200 million reais payment for collective moral damages.
Gislaine Rossetti, a spokeswoman at BASF, was quoted by Reuters as saying that Shell would be solely responsible for reparations linked to soil pollution.
The chemical plant operated from 1977 until it was closed in 2002.
Shell originally owned it, but sold the operation to American Cyanamid in 1995.
Germany-based BASF bought American Cyanamid in 2000 and took over the plant in the city of Paulinia.
Brazil is South America’s biggest economy.