The company is working with university libraries to scan their collections to make them available online.
Publishers and authors' groups sued the company, alleging that the scanning and republishing activity infringed the copyright in the books.
Google has now agreed a deal with the authors' groups and publishers which will see it pay out $125 million and put in place a system by which copyright owners and licensees can be paid for subscriptions to the system and book purchases made through it.
A mechanism will be created to ensure that payment is made to rights holders. It will be called the Book Rights Registry. Google will keep 37% of the money paid through that mechanism.
"Holders worldwide of US copyrights can register their works with the Book Rights Registry and receive compensation from institutional subscriptions, book sales, ad revenues and other possible revenue models, as well as a cash payment if their works have already been digitized," said a Google statement.
Google had said that it should have the right to scan books by default under 'fair use' provisions in copyright legislation. Under the agreement, though, commercially-available books will not be displayed in Google Book Search unless the rights-holder requests it. Out-of-print books will be displayed by default, but a rights-holders can ask for its book to be removed at any time.
Google's Book Search facility will digitise the books and make the contents available to universities on an institutional subscription basis. It will also provide free access to US libraries.
Individuals in the US will be able to search the contents of books and preview them. This will include the many books which are still protected by copyright but are out of print and hard to find. They will be able to buy the books through Google's service.
The company was sued by the Authors Guild and five members of the Association of American Publishers. Those companies were McGraw-Hill, Pearson Education and Pearson-owned Penguin, John Wiley & Sons and Simon & Schuster.
"It’s hard work writing a book, and even harder work getting paid for it,” said Roy Blount Jr., president of the Authors Guild. “As a reader and researcher, I’ll be delighted to stop by my local library to browse the stacks of some of the world’s great libraries. As an author, well, we appreciate payment when people use our work. This deal makes good sense.”
“While this agreement is a real win-win for all of us, the real victors are all the readers," said Sergey Brin, co-founder & president of technology at Google. "The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips.”
The Google Book Search service will make up to 20% of a scanned book available for viewing for free, with the whole book available for a fee.