Twelve others were injured when a truck competing in the California 200 race sailed off a jump and flew into the crowd on Aug. 14, 2010.
With trucks flying by at speeds of up to 100 mph, many spectators were mere feet from the desert course at Soggy Dry Lake Bed near Lucerne Valley.
Those killed in the crash were identified as Andrew Therrien, 22, of Riverside, Brian Wolfin, 27, of Escondido, Dustin Malson, 24, of Ventura, Danica Frantzich, 20, of Las Vegas, Anthony Sanchez, 23, of Escondido, Aaron Farkas, 25, of Escondido, Zachary Freeman, 24, of Fillmore and Michael Dickinson, 34, of Spring Valley.
The land where the crash occurred is owned by the federal government.
If the deal is approved by a judge, the U.S. Bureau of Land Management would be forced to be pay $4.825 million. The promoters of the event, Mohave Desert Racing Inc., and Mojave Desert Racing Products Inc., would provide their $1 million insurance policy limit.
Attorney Katherine Harvey-Lee represents three injured spectators and the father of one person killed and has argued that the race was negligently managed and supervised.
An internal review in 2010 by the BLM concluded the agency failed to adequately monitor the race or properly follow procedures in granting permits to race promoters.
The federal agency admitted only one ranger was patrolling the 50-mile off-road race when the incident occurred.
The BLM had issued permits for the California 200 race, and the agency has maintained that the event's promoters were responsible for spectator safety.
The permits stated that no more than 300 people could attend the event, but thousands of people were stretch along the course.
"When you get a lot of people out in the desert and you have vehicles operating in these races, it just makes sense that there should be some supervision to make sure people don't get hurt," said Harvey-Lee.
The agreement must be approved by the Department of Justice and by a judge in Los Angeles. The Mojave Desert is located 100 miles northeast of Los Angeles.
The Associated Press contributed to this report.
