Parliament in Iceland has approved plans to repay â¬3.8 billion to savers in Britain and the Netherlands.
The money will go to the British and Dutch governments, who partially compensated depositors when the online bank, Icesave, failed in 2008.
The bank had more than 320,000 savers.
A bill on the measure was passed by 33 votes to 30. The Icelandic government had threatened to resign if the measure was rejected.
The money represents 40% of the country's gross domestic product .
Opponents argue that the compensation amounts to some â¬12,000 for each person on the island (population 320,000).
A poll taken in August suggests that 70% of Icelanders were against the Icesave deal.