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OTTAWA, May 10 (Reuters) Canada has agreed to a C$1.9 billion (1.7 billion dollar) deal to compensate thousands of native Indians who say they were sexually and physically abused as children at church-run residential schools, the new Conservative government announced today.

The money will be shared among the 90,000 or so survivors who attended the schools, regardless of whether they allege they were abused. The agreement is subject to court approval.

Under the terms of the plan, which was unveiled last November by the previous Liberal government, each eligible student will receive C$10,000.

''We hope that today's announcement will bring closure to former students and their descendants. The settlement is just and honorable,'' said Indian Affairs Minister Jim Prentice.

The schools -- most of which were were shut down by the mid-1970s -- were supposed to educate native children who came from sparsely populated areas. Many who attended allege they suffered from sexual, physical and mental abuse.

One aboriginal leader has referred to the episode as ''the single most disgraceful, harmful and racist act in our history''.

Canada has around a million aboriginal people, many of whom live in poverty on rural reserves.

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