Google has reached a settlement in its copyright case with several major publishing houses.

The two sides agreed to a $125m settlement to drop the suit over Google's ongoing library digitisation project.

Under the terms of the deal, Google will pay out $45m to address copyright claims from book authors and rights holders. An additional $34.5m will go towards the creation of a registry that will allow publishers to claim royalty payments on any profits Google makes from the service.

The settlement will allow Google to move forward with its plans to build a digital book archive. The company had reached deals with several major public and university library systems to digitise their collections.

"Google's mission is to organise the world's information and make it universally accessible and useful. Today, together with the authors, publishers and libraries, we have been able to make a great leap in this endeavor,” Google co-founder Sergey Brin said in a written statement.

“While this agreement is a real win-win for all of us, the real victors are all the readers. The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips.”

The deal will still need to be approved by the court before becoming official. The company gave no estimate for when the registry will begin operations.