SYDNEY (AFP) - A class action over birth defects linked to the morning sickness drug thalidomide was settled in an Australian court on Monday, with the British distributor agreeing to pay victims A$89 million (S$102 million).

Lawyers representing some 100 Australian and New Zealand victims of the drug told the Victorian Supreme Court that settlement had been reached with Diageo, which owns now-defunct thalidomide distributor The Distillers Company.

"It's been a long time coming," lawyer Peter Gordon told the court.

The payout, plus A$6.5 million in costs, signals an end to the case, with Mr Gordon indicating that an associated compensation suit again German drug manufacturer Grunenthal would be abandoned.

The lawsuit's lead plaintiff Lynette Rowe settled her own case against Diageo in July last year for an undisclosed amount and was in court on Monday to hear Mr Gordon's announcement.

Diageo had indicated at the time of Ms Rowe's settlement that it was prepared to negotiate with the rest of the action's claimants.

Ms Rowe was born in 1962 without arms and legs after her mother took thalidomide during pregnancy. Her legal team claimed Australia had been targeted as a priority market for the drug.

Thalidomide was launched in the late 1950s and was sold in nearly 50 countries before it was withdrawn after babies began showing severe side effects from the drug.

An estimated 10,000 children worldwide were born with deformities, including the absence of arms and legs.