Virginia will close all but one of its large institutions for the developmentally disabled and move thousands of people into their own homes, their family’s homes or group homes as part of a 10-year, $2.1 billion settlement announced Thursday with the U.S. Justice Department.

After decades of legislative reports urging a shift toward community care, Virginia is one of the few states that still place people with developmental disabilities in large institutions.

Other states have been closing facilities for years as the nation’s attitudes and laws have evolved, particularly after the U.S. Supreme Court ruled in 1999 that “confinement in an institution severely diminishes the everyday life activities of individuals.”

Thursday’s announcement follows a federal investigation of Virginia facilities that concluded that the state discriminated against residents by keeping them in large institutions instead of providing community-based care in smaller settings. The institutions were faulted for keeping residents isolated and rarely allowing them to interact with people who are not disabled.

“The agreement will serve the commonwealth’s moral interest in serving people with developmental disabilities in the way most conducive to independence and full participation in community life,” said Thomas E. Perez, assistant attorney general for the civil rights division. 

Some legislators and advocacy groups, including the Arc of Virginia, praised the agreement as a way to improve care for more than 5,000 Virginians. But some families and activists said they are angry that they were not consulted on the agreement and worried about where their loved ones will live.

Jane Anthony’s 37-year-old son, Jason Kinzler, who is unable to speak and tries to eat inedible objects, has lived in the Northern Virginia Training Center in Fairfax County since he was 3 years old.

“The training centers right now are the safety net,’’ said Anthony, of Reston. “One size doesn’t fit all.’’

The cost

Virginia expects to spend $340.6 million to meet the terms of the settlement. It will receive $935 million from the federal government, virtually all of it through Medicaid reimbursements. It intends to cover the rest of the cost through savings, primarily by closing the training centers.

The state had agreed to spend $30 million last year to move developmentally disabled residents from large institutions to community-based care. Gov. Robert F. McDonnell (R) has requested an additional $30 million in his $85 billion spending plan for the two fiscal years that begin in July 2013. The General Assembly has not yet acted on his request.

“For decades, we have said we ought to move to a community-based system for individuals with developmental disabilities and reduce our dependence on state-run training centers, the most costly and restrictive form of services available,’’ McDonnell said. “This agreement accelerates those efforts in a fiscally responsible and strategic manner.”

The Justice Department has worked with about 20 states on similar issues, settling cases with Delaware and Georgia, and is negotiating with a handful of others, including North Carolina and Oregon.

Under court order in 1991, the District shuttered Forest Haven, the city’s notorious institution for the developmentally disabled. But the D.C. government was not prepared to move Forest Haven’s 1,100 residents quickly into the community, and many of the group homes that emerged to care for them were plagued by incompetence and abuse.

Virginia’s agreement, which averted a lengthy and costly legal battle, will be closely monitored by an experienced reviewer and is enforceable by the court.

Within a year, the state is required to develop a plan to close four of Virginia’s five training centers, which house about 1,000 developmentally disabled people statewide.

The state will offer home- and community-based Medicaid waivers to nearly 4,200 people, provide family support to 1,000 people already receiving community-based care and expand crisis services, including hotlines and mobile crisis teams.

It will also create an $800,000 housing-assistance fund, coordinate rental-assistance programs and implement a risk-management system intended to ensure that people receive the services they need.

McDonnell’s office said plans have been developed to close the facilities in Fairfax, Hillsville, Lynchburg and Petersburg between 2014 and 2020. The Northern Virginia Training Center will close by June 30, 2015. The Southeastern Virginia Training Center in Chesapeake will remain open but will be downsized to 75 beds.

“This is going to be a particularly challenging time for families with loved ones in training centers to adjust to this new reality, but I’m absolutely convinced it’s the right thing to do,’’ said Del. Patrick A. Hope (D-Arlington).

State officials e-mailed families, guardians and employees Thursday morning about the plan and said they will conduct follow-up visits to the five centers. Justice Department officials met with families in Richmond on Thursday afternoon.

Tamie Hopp, director of government relations and advocacy at the VOR, a national organization that advocates for people with intellectual disabilities, tried to persuade the Justice Department to allow the families to have a greater say in their loved ones’s care. “The families treasure the services being provided,’’ Hopp said.

The five training facilities house 1,018 people, down from thousands some years ago. The average per-person cost of care in the centers is $216,000 a year, while the statewide average per-person cost in the community is $138,000, according to the governor’s office.

The Arc of Virginia called the agreement a “significant milestone in Virginia’s long road toward community-based care for people with intellectual and developmental disabilities.”

The four training centers that are closing have 3,050 employees, and the Department of Behavioral Health and Developmental Services, which operates the centers, will help them look for new jobs.

Investigation launched

The Justice Department launched an investigation in 2008 after receiving a complaint about potentially unlawful conditions at the Central Virginia Training Center in Lynchburg. Justice declined to comment further on the investigation, and state officials said they were not notified of the specific complaint.

The probe widened when the Obama administration began taking a closer look at states that continue to rely heavily on large institutions to care for people with developmental disabilities.

The three-year inquiry into Virginia’s system examined not only how people were being treated at the training centers but also whether they should be in institutions. The investigation concluded that residents were often isolated, were not allowed to chose what to eat and were often physically restrained.

About 36,000 people with developmental disabilities in Virginia receive services through local and state programs. More than 8,600 are receiving intensive community services intended to avoid institutional placement, and an additional 6,000 who are eligible for the same sort of services are on a waiting list.

The agreement adds 4,170 Medicaid waiver slots for home- and community-based services over 10 years to help move people from training centers to community services and requires the state to provide for the continued growth of such slots.

Staff writer Sari Horwitz and staff researcher Jennifer Jenkins contributed to this report.