(CNN) -- A Chinese company has agreed to pay to repair homes of Americans who complained their drywall made them sick, a committee representing the plaintiffs said Thursday.
Knauf Plasterboard Tianjin will fund a pilot project to replace the drywall in 300 houses in Alabama, Louisiana, Florida and Mississippi as part of "a breakthrough settlement," the company said.
About 10,000 houses ultimately could be included in the settlement, but it does not include other drywall companies, a lawyer for the plaintiffs said.
A government study found hydrogen sulfide and formaldehyde gases in dozens of homes tested, the Consumer Product Safety Commission reported last year.
Two other preliminary studies released last year showed copper sulfide corrosion in metal components taken from homes containing the Chinese drywall.
The drywall in question was imported from 2005 to 2007, when a housing boom and two active hurricane seasons created a shortage of building materials in the southern United States.
The Consumer Product Safety Commission reported getting several thousand complaints from 32 states -- but mostly from Florida, Louisiana and Virginia -- from homeowners complaining of a rotten-egg smell, sickness, failed appliances, and corroded wires and pipes. In some cases, insurers refused to reimburse them.
Homeowners allege the gas is causing home appliances and copper wiring to fail and causes chronic, long-term upper respiratory infections.
The lawyer for the drywall company said it was "standing behind its product."
"The purpose of the demonstration remediation project is to establish a model for the resolution of the KPT drywall issue," said KPT lawyer Gregory Wallance.
The homes will be "stripped to the studs" and repaired, Wallance said.
Another KPT lawyer said if the pilot program is a success they will "see if this can be expanded to cover more homes."
"It's more of the first leg of a journey as opposed to an end," attorney Kerry Miller said.
The settlement does not involve other Chinese drywall makers being sued, Miller said.