WABAMUN, Alta. - Canadian National Railway has reached a $10 million settlement with an Alberta band for damage from a derailment that leaked oil into a nearby lake.

About 800,000 litres of fuel oil and pole-treating oil were spilled in August 2005 during a train derailment.

Due to the prevailing winds at the time, much of the oil wound up on the east side of the lake where the Paul Band reserve is located.

The band launched a lawsuit against CN alleging the oil permanently damaged the plants and animals its members use for food, medicine and spiritual ceremonies.

The agreement, recently approved by a Court of Queen's Bench justice, requires the band to drop its legal action against CN, the Government of Canada and the Government of Alberta.

The massive spill forced 20 people from their homes and cottages, killed hundreds of birds and fish, polluted beaches and shoreline and forced authorities to truck clean drinking water into the area for 18 months.