"This has been a long process filled with prayer, patience and perseverance, but I am pleased to have reached the goal of providing compensation to those who have been harmed; creating a path toward healing; and allowing the church to continue its mission," Archbishop Jerome Listecki said in a written statement.
An attorney who represents some of the victims said the settlement favors the church over the victims, but the other option -- going to trial -- was worse.
"The archbishop and the archdiocese should be ashamed of this settlement," Jeff Anderson told CNN. "I am sad for the survivors that have been put through this ordeal. ... They got bloodied and bruised."
Anderson said the victims didn't get the justice they deserved, adding: "The law just made it easy to protect the archdiocese and hit the survivors with sledgehammers and brass knuckles."
The archdiocese, which filed for bankruptcy in 2011, will include the proposed settlement in a reorganization plan to be filed in three weeks in federal bankruptcy court.
A hearing on the matter is scheduled for November 9.
A leading victims' group called the proposed settlement unjust. The Midwest chapter of the Survivors Network of those Abused by Priests said the victims will get far too little of the money.
"It is exponentially the lowest bankruptcy compensation for victims in the United States," said Peter Isely, SNAP Midwest director.
The Milwaukee Journal Sentinel reported
the deal covers 330 of the 575 claims against the Catholic archdiocese, which has 199 parishes in 10 counties. The SNAP statement said some people will receive no compensation.
Officials from the archdiocese, a creditors' committee and attorneys for the abuse victims met for three days in mid-July to negotiate the settlement, the archdiocese statement said.
In 2010, Listecki apologized about one of the priests involved in the scandal, the late Lawrence Murphy.
"Mistakes were made in the Lawrence Murphy case," Listecki said. "The mistakes were not made in Rome in 1996, 1997 and 1998. The mistakes were made here, in the Archdiocese of Milwaukee, in the 1970s, the 1980s and the 1990s, by the church, by civil authorities, by church officials, and by bishops. And for that, I beg your forgiveness in the name of the church and in the name of this Archdiocese of Milwaukee."
The now-deceased Murphy was accused of molesting as many as 200 boys.
Listecki's reference to Rome was in response to a New York Times story that alleged top Vatican officials, including the future Pope Benedict XVI, failed to discipline or defrock Murphy. The Vatican denied the report.
Most of the alleged abuse took place at the John's School for the Deaf in St. Francis where Murphy began as a teacher in 1950 and was promoted to run the school 13 years later. He resigned from the post in 1974 and died in 1998.
The Archdiocese of Milwaukee said abuse was reported in the fall of 1973 to Milwaukee police, who turned the report over to St. Francis police, but no charges were filed.