The settlement, which includes a $15 million civil fine, stems from lawsuits in which the U.S. Justice Department alleged seven companies illegally released "massive amounts of air pollutants for years," sources told CNN. The agreement to markedly reduce emissions is the largest environmental settlement in the department's history, the network said.

The equipment improvements will be made at power plants in Ohio, West Virginia, Virginia, Indiana and Kentucky, the sources told CNN.

Besides spending $60 million on "mitigation measures" such as cleanup and repair of damaged lands, sources said the company must cut nitrogen oxide by 69 percent within nine years and sulfur dioxide by 70 percent within 11 years.

Justice prosecutors brought the case in 1999 on behalf of the U.S. Environmental Protection Agency, various environmental groups, and the states of New York, New Jersey, Maryland, Connecticut, Vermont, New Hampshire, Rhode Island and Massachusetts.

An official announcement of the settlement is expected Tuesday morning.