US Department of Energy (DOE) will offer $73m as a settlement fund to the state of New Mexico as compensation for the February 2014 nuclear waste incident at the Waste Isolation Pilot Plant (WIPP) in Carlsbad.

The capital will be used for road and other infrastructure projects in the state to recover from the after-effects of violations at the underground nuclear waste dump and nuclear research lab, which had led to the radiation leak at the site.

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The state government has also agreed to waive the fines. Instead, DOE will offer support for a variety of mutually beneficial and critical projects that have been designed to protect local communities and safeguard transportation routes in New Mexico and around DOE sites.

Funds will also be utilised to ensure better safety and security of the nuclear materials and the designated roads via which those are transported.

"The Department of Energy and the State of New Mexico have worked together to identify projects at the Waste Isolation Pilot Plant and the Los Alamos National Laboratory that are mutually beneficial."

US DOE secretary Moniz said: "The Department of Energy and the State of New Mexico have worked together to identify projects at the Waste Isolation Pilot Plant and the Los Alamos National Laboratory that are mutually beneficial and do not detract from cleanup at these sites."

The solution is expected to assist the DOE for resuming operations at the WIPP.

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Moniz added: "The funds we will receive through the agreement will be used to continue ensuring the safety and success of these important facilities, the people who work there, and their local communities."

‘Chemically incompatible’ contents, including cat litter, were identified to be the cause for the accident at the site, reports Reuters.

Federal probe of the mishap revealed that the contents had resulted in a chemical reaction inside a barrel of waste, causing it to rupture.