The old St. Elizabeths Hospital, which once housed the Dixon plaintiffs. (Jeffrey MacMillan/For The Washington Post)

U.S. District Judge Thomas F. Hogan cited “great progress,” including the recent opening of a state-of-the-art hospital, in granting preliminary approval Monday to a settlement agreement in the long-running class action, lawsuit now known as Dixon v. Gray.

”This is a momentous and historic settlement,” said Hogan, the third federal judge to handle a case with what he called a “long and tortured history.”

The case was filed in 1974 by William Dixon and other patients at St. Elizabeths Hospital. At the time, the District or federal governments offered no options for the mentally ill other than the ancient and troubled institution straddling Martin Luther King Jr. Avenue SE.

The District government in 1980 agreed to establish a network of community-based treatment options, but it had difficulty creating and managing the system. In 1997, Judge Aubrey E. Robinson Jr. placed the city’s mental health department under the control of a receiver.

The District regained control in 2000, and it subsequently agreed to meet 19 conditions to end the case. In his most recent report, a court-appointed monitor said 15 of the 19 criteria had been substantially met. And late last year, the District and plaintiffs began settlement talks, and the agreement presented to Hogan Monday eased the remaining four requirements.

Under the agreement, the District has agreed to build or subsidize an additional 300 housing units for the mentally ill, provide employment counseling upon demand and reduce the number of District youth sent to certain private treatment facilities.

The court monitor, Dennis R. Jones, called the settlement a “full and fair resolution” of the case he has overseen since 2000. “In hindsight,” he said, “some of the [exit requirements] probably had a benchmark that was unachievable.”

In the coming months, the District will alert more than 27,000 residents affected by the case about the pending settlement. Hogan scheduled a hearing for Feb. 2 to hear any objections to a final approval of the agreement.

The Dixon case is the oldest of six class-action lawsuits against the District. The others bear on the city’s delivery of services to the developmentally disabled, delinquent youth, special education students and those in the child welfare system.