Libyan leader Muammar Gadafy says a deal has been agreed to increase compensation for a 1989 French airliner bombing.
The deal allows Libya to close the Lockerbie case and repair relations with the West.
A compensation dispute erupted after Britain acted to end UN sanctions on Libya when Tripoli agreed this month to pay $2.7 billion (£1.7 billion sterling) to families of 270 people killed in a 1988 bombing of a Pan Am airliner over the Scottish town of Lockerbie.
But France, a veto-wielding member of the UN Security Council, threatened to block the move unless Tripoli increased compensation to relatives of 170 people killed when a UTA airliner was blown up over the African state of Niger in 1989.
Though Libya has never admitted responsibility, it paid $34 million to France after a Paris court convicted six Libyans in absentia for the killings.
"The problem over the UTA case is over and the Lockerbie case is now behind us. We are opening a new page in our relations with the West," said Mr Gadafy, addressing his nation on the anniversary of a coup that brought him to power in 1969.
Mr Gadafy repeated Libya had no role in the Pan Am or UTA bombings. He said Libya was blamed for both due to disputes with the United States and France in the 1970s and 1980s.
An agreement would open the way for Britain to introduce a twice-delayed motion to end UN sanctions imposed over the Lockerbie bombing. London has said it aimed to do so this week.