Google will pay $125-million to settle a class-action lawsuit with The Authors Guild and the Association of American Publishers over its book-scanning project.

As part of the agreement, Google will expand its Book Search program to include online access to copyrighted books, out-of-print books, and materials from major U.S. libraries. It will also create a Book Rights Registry to compensate authors and publishers for material accessed online.

From the Google blog:

What makes this settlement so powerful is that in addition to being able to find and preview books more easily, users will also be able to read them. And when people read them, authors and publishers of in-copyright works will be compensated. If a reader in the U.S. finds an in-copyright book through Google Book Search, he or she will be able to pay to see the entire book online. Also, academic, library, corporate and government organizations will be able to purchase institutional subscriptions to make these books available to their members. For out-of-print books that in most cases do not have a commercial market, this opens a new revenue opportunity that didn’t exist before.

The Authors Guild and five members of the AAP sued Google in 2005 for using its “technology and clout” for massive-scale copyright infringement.