Chinese media say dairy producers that sold products containing the toxic chemical melamine have agreed to pay compensation to the families of the nearly 300,000 children who became ill or died as a result.
Six children died after ingesting products tainted with melamine.
The official Xinhua news agency said China's Dairy Industry Association announced that 22 dairy producers will make one-time cash payments to the victims' families.
The dairy industry association said the companies will also pay the medical bills for any aftereffects of the poisoning.
Xinhua did not indicate the size of the payments or name the dairy producers that have agreed to make the payments.
On Friday, six men charged with making and selling the tainted products at the center of the scandal went on trial in four courts in China's northern Hebei province.
Xinhua reports that prosecutors say a cattle farmer named Zhang Yujun in Quzhou County concocted hundreds of tons of a so-called "protein powder" made of melamine and malt starch. They say one of his neighbors, Zhang Yanshang, bought and resold the powder.
Four other men - Zhang Heshe, Zhang Taizhen, Yang Jingmin, and Gu Guoping - in Wuji county are accused of adding the powder to raw milk and selling the tainted milk to the Sanlu dairy giant.
Sanlu was the first milk manufacturer found to be selling products tainted with melamine when the scandal surfaced in September. The company declared itself bankrupt earlier this week.
Many families of the poisoning victims are seeking to bring the responsible companies to trial, but say the courts are blocking their petitions.
Some information for this report was provided by AFP, AP and Reuters.