The federal government has agreed to pay 1.05 billion euros with the states of Brandenburg, Saxony-Anhalt, Saxony and Thuringia paying the remainder, the federal finance ministry said in a statement.

The money will cover the cost of regenerating the countryside from 2003 until 2007, by which time about 95 percent of the work should be completed.

Some six billion euros in state money has been spent since German unification a decade ago on the project, which involves work such as securing the ridges of the pits, filling them with water and cultivating the area.

Some 140,000 people worked in communist East Germany's brown coal mining industry before it joined with West Germany in 1990, producing 300 million tonnes a year, or about a third of worldwide brown coal production.

Cheap and plentiful brown coal accounted for more than 80 percent of East Germany's electricity production because the country, and all of communist eastern Europe, lacked the funds to buy alternatives.

In eastern Germany, the industry still employs some 10,000 people at companies Mibrag and Laubag, owned by Swedish-controlled Vattenfall Europe.

And brown coal still accounts for a third of united Germany's energy requirements, according to Uwe Steinhuber, spokesman for LMBV, the company in charge of the clean-up.

"We're selling some of the land to hunters, and gradually creating a string of lakes," Steinhuber said.