The Redwood City Council unanimously approved a settlement agreement with Citizens of the Public Trust and Ted Hannig for $4.5 million Monday night over Docktown Marina for being in violation of the state’s public trust laws.

The deal sets aside $3 million in a fund to clean up any environmental damage that occur in Redwood Creek where the marina is located and to help relocate the 70 or so residents who live there.

The remaining $1.5 million will be paid to attorney Hannig, who filed the complaint against the city in early November.

City Attorney Michelle Marchetta Kenyon told the council that if it didn’t accept the deal the cost to fight the litigation could be far more costly.

It could also have put the city’s $25 million general fund surplus at risk depending on a judge’s action, Councilman Jeff Gee said at the meeting.

The settlement also requires the city to develop an action plan on how to deal with the marina’s residents and any environmental damage that exists in the creek by the end of the year. The city then must start implementing the plan in 2017, according to terms of the agreement.

Docktown is considered to be a violation of the public trust by both staff at the State Lands Commission and state Attorney’s General Office.

The State Lands Commission itself, however, is scheduled to hold a public hearing in April that could ultimately decide the marina’s fate. If the commission does allow Docktown to stay, the settlement with Hannig can be amended, Kenyon said.