Garbage along the shore of the Passaic River in Riverbank Park in Newark. (Dave Sanders for the New York Times)

The Environmental Protection Agency moved a step closer Wednesday toward cleaning up the most polluted stretch of one of the most polluted rivers in the United States.

The agency announced a $165 million settlement with the company that owns the former Diamond Alkali facility in Newark, where the herbicide Agent Orange and pesticides were produced during the 1960s. That factory left a toxic legacy in the form of dioxin, a carcinogen that has persisted in the Passaic in high concentrations. Wednesday’s agreement will require Occidental Chemical Corp. to undertake the engineering and design work to begin one of the largest environmental cleanups in the history of EPA’s Superfund program.

“This is a new chapter in the history of the Passaic River,” Judith Enck, the EPA’s regional administrator, said in a call with reporters. The settlement marks a milestone in the effort to create “a cleaner Passaic River that will protect people’s health and increase the productive use of one of New Jersey’s most important natural resources.”

For generations, the Passaic served as an engine of northern New Jersey’s industrial corridor. But the factories along its banks dumped chemicals, heavy metals and pesticides into the increasingly murky water. These days, the river is a noxious, trash-marred mess. Signs warning “Danger!” tell people not to eat the carcinogenic fish and crabs that come from it. Swimming in it is also a health danger. “New Jersey’s biggest crime scene,” U.S. Sen. Cory Booker (D-N.J.), the former mayor of Newark, has called the river.

“Most people who live and grew up in Newark don’t really remember a time when they could interact with the river,” Ana Baptista, a local activist and environmental policy professor who grew up in the nearby Ironbound neighborhood, told The Post this summer. “Instead of it being a natural resource, it has turned into a blight.”

This spring, the EPA finalized a $1.4 billion, 10-year plan to remove industrial toxins that have built up for more than a century along the Passaic’s lower eight miles. That stretch would be dredged from bank to bank, with more than 3.5 million cubic yards of contaminated sediment removed and a two-foot-thick sand and stone barrier laid to “cap” the river bottom. The contaminated sediment eventually would be shipped to a licensed disposal site out of the state.

Yet that won’t happen anytime soon.

The settlement with Occidental will help to fund only the planning stage of the massive project, which is expected to take about four years.

“We are pleased to have reached an agreement with the U.S. EPA and look forward to partnering with the agency on the remedial design,” spokesman Eric Moses said via email Wednesday.

Federal officials have yet to reach a similar agreement with a group of roughly 100 companies also responsible for polluting the Passaic — a group that includes household names such as Honeywell, Pfizer and Sherwin-Williams — about individual financial obligations. The group has fought large-scale dredging and pushed instead for targeted removal in the river’s dirtiest areas.

Enck said regulators would continue negotiating with the remaining polluters but that under the Superfund program, the companies eventually could be ordered to pay for the remainder of the project to ensure that the burden doesn’t fall to taxpayers.

“They are going to be paying these cleanup costs sooner or later,” Enck said, “and we certainly prefer sooner.”

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