With court approval, it would be the largest cash settlement in the federal Superfund program.
AVX is the successor to Aerovox Corp., an electrical capacitor manufacturer located on the harbor until the 1970s. Regulators say Aerovox discharged hazardous materials, including polychlorinated biphenyl, or PCBs.
The cash will allow cleanup within about seven years, compared with 40 years under gradual government funding.
The New Bedford Standard-Times reports (http://bit.ly/RfD5gQ) Mayor Jon Mitchell called it a "happy day" for the city, and said at a news conference he looks forward to seeing the Achusnet River again safe for swimming.
Attorney General Martha Coakley said the cleanup will bring "a huge opportunity" for economic development.