The payout, arranged last year but only recently announced, is the second-largest made by the State Division of Youth and Family Services over child welfare mistakes, according to state officials.

The size of the settlement is surpassed only by the $12.5 million the state agreed to give to four brothers from Collingswood who were deprived of food and medical care by their adoptive parents. The state announced that settlement last year.

With the Newark case, the settlement money is going to the estate of Faheem Williams, along with two of his siblings who are in foster care.

The discovery in January 2003 of Faheem’s body prompted an overhaul of the child welfare agency. The state had investigated abuse complaints involving Faheem, but had closed the file 11 months before his body was found in the basement of an apartment rented by his older cousin, Sherry L. Murphy.

The boy’s brothers — Raheem Williams, now 11, and Tyrone Hill Jr., 8 — were found emaciated in a room adjacent to where the body was found.

Faheem’s cousin, Wesley Murphy, later pleaded guilty to reckless manslaughter, admitting that while the family was living in Irvington he had killed the child with a wrestling move in which he had forced his knee into the child’s abdomen. He has since served his time.

Ms. Murphy pleaded guilty to two counts each of aggravated assault, criminal restraint and child endangerment for her treatment of the children, and is serving a 25-year prison sentence.

She admitted that she left the boy’s body on the floor of her Irvington home, then put it in a plastic hamper, which she took with her when they moved to Newark.

Faheem, Raheem and Tyrone had been living with Ms. Murphy after their mother, Melinda Williams, went to prison for endangering a child she had been baby-sitting. Ms. Williams was released weeks before Faheem’s death, but had left the children with Ms. Murphy, her sister.

The child welfare agency and state attorney general’s office representatives say the settlement approved by a State Superior Court judge in Newark gives $1 million to Faheem’s estate, $2.75 million to Raheem and $3.75 million to Tyrone.

Lawyers in the case say legal fees still need to be settled, as well as the question of whether the boys’ mother will have access to the money.

A Family Court judge in Newark ended Ms. Williams’s parental rights last summer. She has appealed.