The decision by 15 states was outlined in new documents filed by a mediator in the case and shows they are now siding with an effort to resolve their long-running dispute with the company and its owners, the Sackler family.
The agreement was filed late Wednesday in U.S. Bankruptcy Court in White Plains, N.Y.
Under the settlement, Purdue would make millions of documents public, direct $175 million from the Sackler family to go toward fighting the opioid crisis and require members of the family to give up ownership in the company.
The states, plus several others that have not yet signed onto the agreement, have fought Purdue Pharma's bankruptcy plan in court to seek a modified deal to increase accountability. The deal would result in Purdue giving more of its profits to help fight the opioid crisis.
The updated plan shields the Sacklers from future lawsuits related to OxyContin, which Purdue introduced on the market in 1995.
The family would pay $4.2 billion in installments over the next 10 years, increasing their overall payments by $50 million.
Federal bankruptcy judge and mediator Shelley Chapman said in court documents that all sides negotiated in good faith.
States that signed on to the agreement are Colorado, Hawaii, Idaho, Illinois, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Virginia and Wisconsin.
Others that have fought the bankruptcy plan but have not signed onto the agreement include the District of Columbia, Connecticut, California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont and Washington.
New York Attorney General Letitia James, who initially balked at Purdue's bankruptcy deal, supported the revised version.
"We're holding Purdue Pharma and the Sackler family accountable for their role in fueling the opioid crisis," James tweeted Thursday. "$4.5 billion will go to prevention, treatment and recovery programs in communities across the U.S."
"Purdue will shutdown and the Sacklers will never make opioids again."
"A group of 15 states has negotiated improvements to Purdue Pharma's bankruptcy plan, which I now support," North Carolina Attorney General Josh Stein tweeted.
"Thanks to this agreement, thousands of North Carolinians will receive life-saving treatment and recovery services, Purdue as we knew it will come to an end."
Before the announcement, House oversight committee Chair Rep. Carolyn Maloney, D-N.Y., asked U.S. Attorney General Merrick Garland to reject the reorganization plan. The federal government is one of the creditors in the case and has a vote in whether to accept the agreement.
Purdue filed for bankruptcy in 2019 in response to thousands of lawsuits that argued the company was responsible for worsening the opioid crisis in the United States through its marketing efforts for OxyContin.