Present and former female staff at South Lanarkshire Council had asserted they were earning less than men in comparable, but different, jobs.
The multi-million pound settlement came seven months after a separate case in which the council was faced with a near £200,000 legal bill over a failed bid to block information about its pay scales.
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The Labour-run local authority threw out requests for informa-tion from equal pay campaigner Mark Irvine. When the Scottish Information Commissioner supported his case, the council appealed unsuccessfully to the Court of Session.
The latest settlement follows months of discussions.
Paul Manning, the council's executive director of finance and corporate resources, said: "South Lanarkshire has long been committed to equality of pay for those in comparable jobs, regardless of gender. We are glad to be in a position to continue to lead the way on this issue by settling with these claimants."
Carol Fox, of the legal firm Fox and Partners, said: "This has been a complex and long-running case but we are delighted that we have been able to secure a settlement that we can recommend to our clients.
"It has taken a considerable amount of time and legal work to progress a mass settlement for more than 3000 individual claimants. We will be contacting them all in due course to outline what the settlement means to them, and we ask them for their continued patience and co-operation as we do that in the coming months."
The latest round of negotiations started last August after council leader Eddie McAvoy asked officers to start talks with a view to a possible settlement.
Councillor McAvoy said: "The administration has been guided throughout this process by the legal advice we have received, but we've always been clear that any claimants who were entitled to additional money should get it.
"Towards the end of last year it seemed that the circumstances were right to try to achieve a negotiated settlement, and I am pleased that the talks have concluded successfully."
A report to yesterday's executive committee said that the settlement would be paid from funds the council holds in reserve, with no impact on services, need for asset sales or more borrowing.